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1. 1 Pros/Cons of Benchmarking Dr. Stephan Vaterlaus, Head of Plaut Economics Plaut Economics has accompanied German and Austrian energy associations (BGW, VDEW, VDN, VEÖ, BGW) in the context of incentive regulation and benchmarking during the last few years.
Plaut Economics conducting electricity and gas benchmarking projects in Switzerland.
Four topics of my presentation:
Role of benchmarking in an incentive regulation
Advantages of benchmarking
Challenges of benchmarking in an incentive regulation
Conclusions
2. 2 Role of benchmarking in an incentive regulation
3. 3 Avantages of Benchmarking Without benchmarking, inefficient companies can more easily fulfil target for efficiency increases than efficient companies.
Without benchmarking, regulators have to apply instruments of cost control that contain more subjective elements than benchmarking.
Benchmarking gives companies an reference on what is possible in the context of business management.
? However, benchmarking is an ambitious instrument !
4. 4 Methods
5. 5 Challenges: Data validation
6. 6 Challenges: Number of Companies
7. 7 Interference of costs
8. 8 Conclusions To get robust benchmarking results one has
to invest into the data validation and to correct OPEX and CAPEX to get a comparable data base.
to use different benchmarking methods.
to consider the uncertainty in the results using different correcting measures (define a minimum efficiency score, applying the highest efficiency score of the different methods, ..).
Using benchmarking results one has
to make sure that the regulation cost base and the benchmarking cost base correspond.
to allow a long time period to realise cost reduction measures.
to consider individual specifics of the supply area of a company.
