Does Weather Explain Cost and Quality Performance? An Analysis of UK Electricity Distribution Companies

William Yu, Tooraj Jamasb*, Michael Pollitt

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

In recent years, a number of empirical studies and energy regulators have applied benchmarking techniques to measuring the efficiency and performance of network utilities. An important issue has been the extent to which the results are influenced by contextual factors. Among these, weather factors are frequently discussed as being important. We use factor analysis and two-stage data envelopment analysis techniques to examine the effect of a set of important weather factors (gale, hail, temperatures, rainfall and thunder) on the performance of electricity distribution networks in the UK. The results indicate that such factors often do not have a significant economic and statistical effect on the overall performance of the utilities. The weather parameters in some models are significant in terms of economic efficiency. The results echo our previous findings of the importance of extending the basic model to include other inputs such as total expenditure (Totex), customer minutes lost (CML) and network energy losses in regulatory benchmarking.
Original languageEnglish
JournalEnergy Policy
Volume37
Issue number11
Pages (from-to)4177-4188
Number of pages12
ISSN0301-4215
DOIs
Publication statusPublished - 2009
Externally publishedYes

Keywords

  • Electricity
  • Weather
  • Quality of service

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