1. REMUNERATING DISTRIBUTION IN SPAIN
Jordi Dolader, Luis Maqueda, Antonio Candela
CIRED Barcelona

2. REGULATORY POINT OF VIEW(I)
NATURAL MONOPOLY
ECONOMIES OF SCALE
COST SUBADITIVITY
NETWORK ECONOMIES
A BIG PROBLEM :
CROSS SUBSIDIES

3. REGULATORY POINT OF VIEW(II)
PROFIT
OPORTUNITY
PRICES CUT DOWN
CUSTOMERS
FIRMS
AVOID ABUSE OF NATURAL MONOPOLY
DISTORSION IN THE ACTIVITY
REGULATORY
COSTS
BENEFITS COSTS
SAVINGS FROM THE EFFICIENCY MEASURES
REGULATORY COSTS

4. INCENTIVE REGULATION
Decouples profits from firm´s costs
Remuneration procedurement fixed for the rate period
Incentives to reduce and control its costs
QoS problems, ratched effect

5. GENERAL SCHEME

6. REGULATORY ACCOUNTS

7. REFERENCE NETWORK MODEL
Basis
Results
Location and characterisation of demand
Facilities
Minimizing trinomial
(Investment, Operation cost and Losses)
WORKING UNDER DIFFERENT SUPPOSALS
Catalogue of instalments
Subject to
QoS requirements
Facilities in different Scenarios

8. ANALYSIS PROCEDUREMENT

9. UPDATING REMUNERATION (I)
Losses reduction incentives
Efficiency factor
Quality of service
Firm
Year
Recognised costs for increased activity
Adjusting factor from forecasted values to real ones
Remuneration
Forecasted increase in the Retail Price Index

10. UPDATING REMUNERATION (II)
Recognised costs for increased activity
Increasing activity costs will be remunerated considering activity costs inductors
Incentives for better quality of services
The incentives/penalties that will be received by each firm, is calculated with this phormula:

11. UPDATING REMUNERATION (III)
Incentives for losses cut down
Incentives and penalties that will be given to each firm for their losses reduction, will be calculated with this phormula:
Updating forecasted parameters in the past with real ones