ELECTRICITY AND NATURAL GAS DISTRIBUTION COMPANIES BENCHMARKING IN ERRA MEMBERS

Transcription

1 ELECTRICITY AND NATURAL GAS DISTRIBUTION COMPANIES BENCHMARKING IN ERRA MEMBERS Nebojsa Despotovic & Mladen Petronijevic Energy Agency of the Republic of Serbia January 25-26, 26, 2 Amman, Jordan

2 DEFINITION OF BENCHMARKING Benchmarking is a multi-step process for comparison of distribution companies in the following steps: Selection of a sample of appropriate companies Determination of input/output data which will be analysed Identification of the most efficient companies in the sector (in the sample) Determination of the efficiency frontier (reference value) Measurement of the relative inefficiency of other companies against the referent value Assignation of individual incentive factor X on MAR to the companies

3 ELECTRICITY BENCHMARKING

4 I DATA VALIDATION - ELECTRICITY DATA VALIDATION - ADJUSTED DATA (Data for 28) O/ N Country Country Codes Ownership Statusx) Method of Regulationy) Served Area (sq. km) Total length of Lines (km) Total Electricity Distributed (MWh) Total number of consumers connected Employe es O&M Costs ( US$) O&M Costs ( PPS) Armenia Arm Serbia Ser Serbia 2 Ser Serbia 3 Ser Serbia 4 Ser Serbia 5 Ser Lithuania Lit & Lithuania 2 Lit Latvia Lat Macedonia Mac Bulgaria Bul & Bulgaria 2 & Bulgaria 3 Bul3 & Hungary Hun Hungary Hungary Hungary Hungary Hungary 6 Hun

5 I/ DATA VALIDATION - ELECTRICITY DATA VALIDATION - ADJUSTED DATA (Data for 28) O/N Country Country Codes Ownership Statusx) Method of Regulationy ) Served Area (sq. km) Total length of Lines (km) Total Electricity Distributed (MWh) Total number of consumers connected Employe es O&M Costs ( US$) O&M Costs ( PPS) 2 Slovakia Slo & Slovakia 2 Slo Slovakia 3 Slo Georgia Geo & Bosnia&Her. Bih Bosnia&Her. 2 & Bosnia&Her. 3 Bih3 & Montenegro Mne Croatia Cro Notes : x) Private -, State Owned -, Municipal - 2; y) Cost Based -, Performance Based or Incentive - Uncopleted and/or unrealible data: Georgia 2 and Mongolia Weighted factor: 5% MWh/Opex( PPS) and 5% Customers/Opex( PPS)

6 II/ BENCHMARKING RESULTS Distributed energy / employee Uni dimensional indicators Distributed energy / number of customers Distributed energy / OPEX Number of customers / OPEX They appear in annual reports of companies They are easy to calculate and interpret There are no unique approach for: selecting the observed indicators and determining weighting factors for each observed indicator Company A B Uni-dimensional indicators Employees / Users of the system (in ) 6 Costs / Distributed energy ( mil.din/kwh) 3 8 Weights Combined indicators case : 25/ case 2: 5/ case 3: 75/

7 II/2 BENCHMARKING RESULTS Uni dimensional indicators MWh / OPEX ( PPS) % % 94% 9% 8% 89% 87% 87% 86% 86% 83% 8% 8% 8% 78% 75% 72% 7% 7% 6% 5% 4% 3% 2% % % Ser5 Lit Ser3 Arm Ser2 Slo2 Hun Lit2 Hun6 Bih3 Ser4 Ser Cro Geo Bul Mac Bih Bul3 69% 69% 65% 64% 63% 63% 6% 58% 54% 5% 46% 45% 44% Slo3 Slo Mne Lat

8 II/3 BENCHMARKING RESULTS Uni dimensional indicators Customers / OPEX ( PPS) % % 98% 94% 9% 85% 83% 8% 79% 79% 8% 7% 6% 5% 4% 3% 2% % % 72% 7% 66% 65% 65% 64% Geo Arm Lit Hun Bul Lit2 Hun6 Bih3 Bul3 Bih Ser4 Ser3 Slo2 Ser5 Ser2 6% 59% 59% 57% 57% 56% 55% 52% 52% 44% 43% 4% Ser Cro Mac Mne Lat Slo Slo3 37% 28%

9 75% 74% 73% 73% 7% 69% II/4 BENCHMARKING RESULTS Uni dimensional indicators Total Weighted Rank % % 99% 94% 9% 8% 9% 89% 88% 86% 86% 85% 83% 83% 82% 8% 7% 6% 5% 4% 3% 2% % % Lit Ser5 Arm Ser3 Ser2 Hun Slo2 Lit2 Hun6 Bih3 Geo Ser4 Ser Bul Cro Bih M ac Bul3 66% 64% 63% 63% 59% 49% 47% 47% 46% Slo3 Slo M ne Lat

10 II/5 BENCHMARKING RESULTS OLS & COLS regression lines (COLS optimal sample: without Ser5, Mne, Geo, Bih3 and Bih) Statistical method of regression analysis Reference line shows the average cost for each input unit of product Corrected reference line is determined for the company that has the best ratio of costs per input unit OLS & COLS

11 II/6 BENCHMARKING RESULTS Ranking using COLS (COLS optimal sample: without Ser5, Mne, Geo, Bih3 and Bih) Ranking using COLS 2% % % 87% 87% 87% 83% 82% 8% 75% 72% 69% 65% 65% 63% 57% 6% 55% 55% 52% 5% 49% 44% 44% 42% 4% 4% 3% 2% % Ser2 Slo2 Ser3 Cro Bul Arm Bul3 Ser Lit Lit2 Hun Hun6 Mac Ser4 Lat Slo3 Slo

12 II/7 BENCHMARKING RESULTS Data Envelopment Analysis DEA is a non parametric method based on linear programming technique Maximization of operational efficiency of company Technical efficiency reflects the ability of a company to achieve maximum production output from a given combination of inputs (labor, capital) and Alocative efficiency reflects the ability of company to use inputs (labor, capital) in optimal proportions taking into account their relative prices. TEi = OQ/OP AEi = OR/OQ OEi = TEi * AEi = OR/OP

13 2% % 8% 6% 4% 2% % 6%5% 3% 2% II/8 BENCHMARKING RESULTS Ranking using DEA Ranking using DEA 9% 9% 89% 88% 87% 87% 84% 84% 83% 83% 8% 75% 74% 74% 7% 67% 67% 66% 64% 64% 5% 47% 47% 46% Slo Mne Lat Ser3 Hun Ser2 Lit2 Slo2 Hun6 Bul Bih3 Ser4 Ser Cro Bul3 Mac Bih Slo3 Ser5 Lit Arm Geo

14 II/9 BENCHMARKING RESULTS Ranking using all methods (COLS optimal sample: without Ser5, Mne, Geo, Bih3 and Bih) Uni-dimensional x) COLS DEA Rank Score Rank Score Rank Score Lit,%,% Ser5 5,85% Ser5 98,78% 86,95% Lit 5,46% Arm 93,7% Ser2 86,73% Arm 2,59% 9,% Slo2 86,54% Geo,68% Ser3 88,99% Ser3 82,7% 9,4% 87,93% Cro 8,99% Ser3 89,86% Ser2 86,6% Bul 75,34% 88,54% 85,6% Arm 72,22% Hun 88,% Hun 85,46% 68,99% 87,44% Slo2 83,26% Bul3 65,26% Ser2 87,2% Lit2 83,% Ser 64,52% Lit2 84,% 82,28% Lit 63,% Slo2 83,96% Hun6 8,33% Lit2 56,92% 82,87% Bih3 75,8% Hun 55,% Hun6 82,66% Geo 73,54% 54,98% Bul 8,37% Ser4 73,37% Hun6 52,9% Bih3 75,22%

15 II/9a BENCHMARKING RESULTS Ranking using all methods (COLS optimal sample: without Ser5, Mne, Geo, Bih3 and Bih) Uni-dimensional x) COLS DEA Rank Score Rank Score Rank Score 73,32% 5,33% 74,37% Ser 7,3% Mac 48,69% Ser4 73,7% Bul 69,4% Ser4 44,5% Ser 7,59% Cro 66,4% Lat 43,6% Cro 66,75% Bih 63,59% Slo3 42,42% Bul3 66,57% Mac 63,37% Bos2 4,23% 65,74% Bul3 62,58% Slo 3,5% Mac 63,86% 58,78% Ser5 Bih 63,8% Slo3 49,9% Mne Slo3 49,69% Slo 47,24% Geo Slo 47,49% Mne 47,% Bih3 Mne 47,6% Lat 45,82% Bih Lat 45,9% Note: x) Weighted factor: 5% MWh/Opex ( PPS) and 5% Customers/Opex ( PPS)

16 Ser Ser2 Ser3 % 8% 6% 4% 2% % II/ BENCHMARKING RESULTS Ranking using all methods Ranking using all methods Uni COLS DEA Ser4 Lit Lit2 Lat Mac Bul Bul3 Hun Hun6 Slo Slo2 Slo3 Cro Arm

17 NATURAL GAS BENCHMARKING

18 I DATA VALIDATION NATURAL GAS DATA VALIDATION - ADJUSTED DATA (Data for 28) O/N Country Count ry Codes Ownership Status x) Method of Regulati on y) Served Area (sq. km) Total length of Lines (km) Total Natural Gas Distribute d (m 3 ) Total number of consumers connected Employ ees O&M Costs ( US$) O&M Costs ( PPS) Lithuania Lit (76 %-); (7,7 %-); (6,3 % -2) () ir () Armenia Arm Latvia Lat Slovakia Slo / Georgia Geo Bosnia&Her. Bih Bosnia&Her Bulgaria Bul Bulgaria Bulgaria 4 Bul4-65% ; 2-35% Bulgaria 6 Bul Bulgaria 7 Bul Bulgaria 8 Bul Bulgaria 9 Bul Bulgaria Bul

19 I/ DATA VALIDATION NATURAL GAS DATA VALIDATION - ADJUSTED DATA (Data for 28) O/N Country Count ry Codes Ownership Status x) Method of Regulati on y) Served Area (sq. km) Total length of Lines (km) Total Natural Gas Distribute d (m 3 ) Total number of consumer s connected Employ ees O&M Costs ( US$) O&M Costs ( PPS) 6 Bulgaria Bul Bulgaria Bulgaria 3 Bul Bulgaria 4 Bul Bulgaria 5 Bul Bulgaria 6 Bul Bulgaria 7 Bul Bulgaria 8 Bul Hungary Hun Hungary Hungary Hungary Hungary Note s: x) Private -, State Owned -, Municipal - 2; y) Cost Based -, Performance Based or Incentive - Unrealible data: Bul3, Bul5, Bul9 and Weighted factor: 5% m 3 / Opex ( PPS) and 5% Customers / Opex ( PPS)

20 II/ BENCHMARKING RESULTS Uni dimensional indicators m3 / OPEX ( PPS) % % 9% 8% 77% 76% 72% 7% 63% 62% 6% 54% 5% 49% 48% 5% 4% 3% 2% % % Bul7 Bul6 Bul8 Lat Arm 4% 39% 38% 38% 37% 37% 35% 35% Bul5 Bul6 Bul8 Bul9 Bul Hun Bul4 Bul Bul7 32% 3% 3% 3% 29% Bul Slo Lit 2% 8% 4% 4% Bul3 Bih Bul4 Geo 7%

21 II/2 BENCHMARKING RESULTS Uni dimensional indicators Customers / OPEX ( PPS) % % 98% 95% 94% 9% 86% 84% 8% 77% 76% 73% 7% 6% 63% 57% 55% 5% 49% 49% 42% 4% 37% 36% 4% 34% 34% 3% 2% % % Arm Lat Lit Hun Geo Bul7 Bih Bul8 Slo Bul7 Bul Bul9 Bul5 Bul3 Bul8 Bul Bul6 Bul Bul4 26% 22% 9% 6% 5% 9% 3% 2% Bul6 Bul4

22 II/3 BENCHMARKING RESULTS Uni dimensional indicators Total Weighted Rank % % 9% 8% 7% 83% 73% 73% 7% 7% 6% 54% 5% 5% 49% 49% 48% 48% 46% 43% 4% 4% 39% 39% 38% 37% 36% 35% 34% 3% 2% % % Bul7 Bul8 Lat Arm Bul6 Bul5 Bul9 Bul6 Bul8 Hun Bul Lit Bul Bul4 Bul7 Slo Bul Bih Bul3 Geo Bul4 3% 25% 24% 22% 3% 2%

23 II/4 BENCHMARKING RESULTS OLS & COLS regression lines OLS & COLS

24 II/5 BENCHMARKING RESULTS Ranking using COLS Ranking using COLS 5% % -5% -% -5% Arm % 88% 85% 74% 72% 7% 32% % -7% -29% Lat Slo Lit Hun Geo -243% -42%-626% -2324%-2945% Bih Bul Bul Bul8 Bul7-4286% -5276%-66% -6346% Bul Bul8 Bul5 Bul4 Bul3-8383% -644% -945% -429%-456% Bul6 Bul4 Bul9 Bul7 Bul6-2% -7866%-7882% -244% -25% % -3%

25 4% 2% % 8% 6% 4% 2% % 3% II/6 BENCHMARKING RESULTS Ranking using DEA Ranking using DEA 2% % % 95% 94% 86% 77% 77% 76% 76% 73% 63% 56% 55% 54% 5% 49% 49% 47% 46% 4% 39% 37% 36% 34% 3% 4% Arm Lat Lit Bul8 Bul6 Hun Geo Bul5 Bih Bul9 Bul6 Slo Bul8 Bul Bul7 Bul Bul4 Bul3 Bul Bul4 Bul7

26 II/7 BENCHMARKING RESULTS Ranking using all methods Uni-dimensional x) COLS DEA Rank Score Rank Score Rank Score Bul7,% Arm,% Bul7 3,24% 82,93% 88,3% Arm 2,38% Bul8 73,34% Lat 85,6%,67% Lat 72,88% 73,5% Lat 99,82% Arm 7,46% Slo 72,2% 95,43% Bul6 7,44% 7,6% 94,4% Bul5 54,2% Lit 3,57% Lit 85,54% Bul9 49,82% Hun 9,95% 77,3% 49,49% -6,84% Bul8 76,7% Bul6 49,7% Geo -29,7% Bul6 75,62% Bul8 48,43% Bih -242,82% Hun 75,58% 47,78% Bul -42,8% 72,83% Hun 46,27% Bul -626,29% Geo 62,83% 43,48% Bul8-2323,95% Bul5 55,63% 4,4% -2945,2% Bih 55,48%

27 II/7a BENCHMARKING RESULTS Ranking using all methods Uni-dimensional x) COLS DEA Rank Score Rank Score Rank Score Bul 39,37% Bul7-4285,89% Bul9 53,74% Lit 39,7% Bul -5276,28% Bul6 5,72% Bul 37,73% -66,4% Slo 48,98% 37,23% Bul8-6346,9% Bul8 48,74% Bul4 36,49% Bul5-8382,53% Bul 46,57% Bul7 35,22% Bul4-643,89% Bul7 45,73% Slo 34,43% Bul3-945,44% 4,49% Bul 29,6% Bul6-429,92% Bul 39,38% Bih 24,96% Bul4-456,4% Bul4 37,37% Bul3 24,6% Bul9-7865,86% 35,54% Geo 2,93% Bul7-788,9% Bul3 33,92% Bul4 2,89% -243,75% Bul 29,8%,95% Bul ,9% Bul4 3,58% Note: x) Weighted factor: 5% m3 / Opex ( PPS) and 5% Customers / Opex ( PPS)

28 % 8% 6% 4% 2% % II/8 BENCHMARKING RESULTS Ranking using all methods Ranking using all methods Uni COLS DEA Lit Arm Lat Slo Geo Bih Bul Bul4 Bul6 Bul7 Bul8 Bul9 Bul Bul Bul3 Bul4 Bul5 Bul6 Bul7 Bul8 Hun

29 NEXT STEPS Promising and useful results of the benchmarking exercise Proceed with annual data collection for electricity and natural gas distribution benchmarking Circulate the questionnaire for 29 data (ERRA Secretariat) ERRA Chairmen Committee (Vilnius) encouraged the Distribution benchmarking exercise and suggested that all countries take part. Proposal of the Tariff Pricing Committee to the ERRA Presidium (Meeting in Amman, or Budapest in April): Publish the database on ERRA web-site as an commercial ERRA product- possible benefit for ERRA budget

30 THANK YOU FOR YOUR ATTENTION Contact: Nebojša Despotovi Senior Expert for Economics and Finance Energy Agency of the Republic of Serbia Terazije 5 / V Belgrade - Serbia Tel: Fax: nebojsa.despotovic@aers.rs URL: