Service quality performance indicators for electricity distribution in Brazil

• Published in: Utilities policy 2023-02, Vol.80, p.101481, Article 101481
• Main Authors: de Mendonça, Mário Jorge Cardoso, Pereira, Amaro Olimpio, Bellido, Marlon Max H., Medrano, Luis Alberto, Pessanha, José Francisco Moreira
• Format: Article
• Language: English
• Subjects: Bayesian inference; Electric utilities; Stochastic frontier
• ISSN: 0957-1787; 1878-4356
• DOI: 10.1016/j.jup.2022.101481

One key aspect of electricity quality is the continuity of supply, assessed based on duration and interruption frequency indicators. In Brazil, these indicators are used to assess utility performance, including tariff reviews. This paper proposes adopting a stochastic frontier analysis to benchmark the continuity indicators. Based on Bayesian inference, the model can consider the temporal dynamics of utility performance in terms of gains from economies of scale due to market expansion. The results show that performance targets defined by the proposed methodology are compatible with those defined by the regulatory body. •Adoption of a Stochastic Frontier Analysis in benchmarking the continuity indicators of electric utilities.•Estimated on the basis of the Bayesian inference, is also capable of considering the temporal dynamics of the performance of electric utilities.•The dynamic aspect of efficiency is also of major importance for tariff review.•The results showed that the performance targets defined by the proposed methodology are compatible with those defined by the regulatory body.