Research Update
Winter 2012
More than 10 working papers and publications have been posted since the last Research Update. The listing below illustrates the range of topics addressed in these studies.
PURC Celebrates Its 40th Year
PURC commemorates its 40th anniversary this year. Since its founding in 1972, PURC has grown from a small group hosting one meeting each year to an internationally recognized research center offering expanded training and interdisciplinary development programs reaching thousands of professionals in the U.S. and abroad. Learn more about PURC.
Towards New Regulatory Regimes in Globalized Infrastructure
by Mark A. Jamison
Should infrastructure regulation be internationalized? In some ways it already is. The EU and ECTEL are both examples of supranational regulation. There does not appear to be a pressing need to further internationalize regulation. Legitimate experiments involving the co-evolution of service providers, customers, and governance institutions should be encouraged, but with a cautious watch on creating institutions that are difficult to undo should the experiment show that further internationalization was unproductive. Read the paper, "Towards New Regulatory Regimes in Globalized Infrastructure".
Adaptive Leadership in the U.S. Energy Sector
by Eric R. Martin
The question facing every energy CEO today is whether climate change can be viewed as simply another risk, or if it requires a strategic adaptation in their company’s DNA. Distinguishing between essential current business practices needed to move forward and expendable practices that must be let go to make room for progress and innovation is a critical and often difficult leadership challenge. This paper suggests a bright future for companies that can adapt and even embrace uncertainty. Read the paper, "Adaptive Leadership in the U.S. Energy Sector".
Utility Benchmarking and Regulation in Developing Countries: Practical Application of Performance Monitoring and Incentives
by Silver Mugisha
Achieving best practices in utilities performance can be challenging, especially in developing countries where operational settings are often unpredictable. This book makes clear which systems work best in these complex situations.
Utility Benchmarking and Regulation in Developing Countries examines performance monitoring and regulation as a prominent efficiency enhancement tool. Principles and practices are linked in a way that is informative and accessible highlighting challenges for the water sector. A case study on the National Water and Sewerage Corporation in Uganda details disparities in basing performance conclusions on partial performance indicators on one hand and aggregate analysis using modern benchmarking toolkits on the other.
This is an excellent handbook for utility monitors or regulators whose primary duty is to oversee performance management. It is a valuable resource for decision-makers, analysts, and policy-makers and can be used in capacity-building programs both in-house and in universities around the world.
Florida’s Storm Hardening Effort: A New Paradigm for State Utility Regulators
by Lynne Holt and Theodore Kury
This paper describes a multi-year process involving collaboration among electric utilities, the public service commission, and research institutions to improve preparations for future storms using Florida as a case study. The process included planning and decision making about costs and benefits associated with investments in storm hardening with the goal of preserving the reliability of the power system. Although Florida’s storm hardening initiative focused on hurricanes, the same process could easily apply to other types of weather events such as ice storms, high winds, and thunderstorms. Moreover, the policy questions raised from the Florida case study would likewise apply to other types of storm hardening investigations. Read the paper, "Florida’s Storm Hardening Effort: A New Paradigm for State Utility Regulators".
The Deployment of Third-Generation Mobile Services: A Multinational Analysis of Contributing Factors
by Sangwon Lee, Sylvia M. Chan-Olmsted, and Heejung Kim
Successful diffusion of 3G mobile is necessary for many advanced mobile applications such as mobile broadband Internet and video. The current deployment of 3G services is significantly more developed in some countries than others. This study examines the factors affecting such differences. It finds that competition in standards, lower levels of 1G and 2G penetration, and higher levels of income contribute to the diffusion of 3G mobile. Read the paper, "The Deployment of Third-Generation Mobile Services: A Multinational Analysis of Contributing Factors".
Designing Optimal Gain Sharing Plans to Promote Energy Conservation
by Leon Yang Chu and David E. M. Sappington
What methods of profit sharing best promote energy conservation? This study shows how the optimal plan varies as industry conditions and the regulator’s information change. It demonstrates the importance of allowing the energy supplier a choice among plans, some of which offer the prospect of both pronounced financial gains for superior performance and substantial losses for inferior performance. Read the paper, "Designing Optimal Gain Sharing Plans to Promote Energy Conservation".
Consumer Usage of Broadband Internet Services: An Analysis of the Case of Portugal
by Janice A. Hauge, Mark A. Jamison, and Mircea I. Marcu
Do customers have different preferences for fixed versus mobile broadband? This study analyzes the intensity and patterns of use of fixed and mobile broadband consumers in Portugal. Results indicate that broadband uses are similar across fixed and mobile users, suggesting that the technologies are somewhat substitutable from customers’ perspectives and raising the possibility of limited differential effects on innovation and other social goals. Read the paper, "Consumer Usage of Broadband Internet Services: An Analysis of the Case of Portugal".
Translations of the BoKIR Glossary
The Body of Knowledge on Infrastructure Regulation (BoKIR) is a resource for regulators, policy analysts, infrastructure managers, and researchers. Translations of the Glossary are available in Chinese, French, Italian, Portuguese, and Spanish. Recent additions include Thai and Japanese. Translations in progress include Russian (thanks to the Institute of Pricing and Natural Monopolies Regulation, Moscow) and Arabic (thanks to the Electricity & Cogeneration Regulatory Authority (ECRA) of The Kingdom of Saudi Arabia). If your organization would like to sponsor a translation into another language, please contact PURC via email (purcadmin at warrington.ufl.edu).
BoKIR: New Frequently Asked Questions on Renewables and Energy Efficiency
The FAQ section of the BoKIR will be adding a new topic that focuses on ways regulators and managers can promote renewables and energy efficiency using cost-effective methods. Suggestions for readings or specific questions should be sent to PURC via email (purcadmin at warrington.ufl.edu).
3rd Annual Public Utility Research Center Prize for Best Paper in Regulatory Economics
Two papers won the 3rd Annual Public Utility Research Center Prize for the best paper in regulatory economics and were accepted for presentation at the 9th Annual International Industrial Organization Conference.
- Joseph Cullen (Harvard University) “Measuring the Environmental Benefits of Wind Generated Electricity.”
- James D. Campbell, (University of Toronto), Avi Goldfarb (University of Toronto), and Catherine Tucker (MIT) “Privacy Regulation and Market Structure.”
Did You Miss These Studies?
Water Utility Benchmarking: Measurement, Methodologies, and Performance Initiatives
by Sanford V. Berg
Benchmarking is essential for those developing and implementing water policy. If decision-makers do not know where they have been or where they are, it would seem to be impossible to set reasonable targets for future performance. Information on water/sewerage system operations, investments, and outputs is essential for good management and oversight. This book is designed to help decision-makers identify the data required for performance comparisons over time and across water utilities, to understand the strengths and limitations of alternative benchmarking methodologies, and to perform (or commission) benchmark studies. In addition, it identifies ways to determine the robustness of performance rankings. Current benchmarking activities in Latin America, Asia, Africa, Central Europe/Asia, and OECD nations are summarized. Read the paper, "Water Utility Benchmarking: Measurement, Methodologies, and Performance Initiatives".
Reset for Regulation and Utilities: Leadership for a Time of Constant Change
by Mark A. Jamison and Araceli Castaneda
This paper describes a process of change for regulation and utilities in today's dynamic and uncertain environment. Using the concept of “reset,” which means developing fresh perspectives and knowledge about the future, all the while holding in trust the wisdom of the past, the paper examines three juxtapositions. The first is to focus on next practices, not best practices. Best practice is about following in someone else's footsteps, whereas next practice is about going into areas where no one has gone before. The second is focusing on why rather than focusing on what. Asking “What should we do next?” emphasizes practice, whereas asking “Why have certain practices been successful?” searches for underlying needs and context. The third juxtaposition is between leading and leadership. A leader provides direction, which is proper when the right direction is known. In contrast, leadership mobilizes people to tackle difficult and often ambiguous problems and circumstances. Read the paper, "Reset for Regulation and Utilities: Leadership for a Time of Constant Change".
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