Efficiency analysis of maintenance and outage repair in electricity distribution

Abstract

For several years electricity distribution companies have been using efficiency and productivity analysis in the form of data envelopment analysis and stochastic frontier analysis to analyse their operations. This reflects both market forces and responses to regulatory incentives. However we show that there is a significant difference in purpose and implementation between public regulatory benchmarking and internal company benchmarking. In this paper we use a variety of data envelopment analysis models to examine data on maintenance and outage repair on the electricity distribution system during 2004 -2005 in Portu­gal. In particular we examine the relationship between orientated and non-orientated models, and radial and non-radial analysis. We develop performance measures for the regional electricity networks operated in Portugal by EDP Distribuição, and we discover very close relationships among the performance rankings under different models, fulfilling widely-used consistency conditions for performance modeling. The paper uses the experience of this company example to draw some lessons about how performance measurement can be implemented within a company, in contrast to the usual objective of regulatory benchmarking procedures.