Incentive regulation and utility benchmarking for electricity network security

Nepal, Rabindra and Jamasb, Tooraj (2015) Incentive regulation and utility benchmarking for electricity network security. Economic Analysis and Policy, 48 117-127. doi:10.1016/j.eap.2015.11.001


Author Nepal, Rabindra
Jamasb, Tooraj
Title Incentive regulation and utility benchmarking for electricity network security
Journal name Economic Analysis and Policy   Check publisher's open access policy
ISSN 0313-5926
Publication date 2015-12-02
Sub-type Article (original research)
DOI 10.1016/j.eap.2015.11.001
Open Access Status Not Open Access
Volume 48
Start page 117
End page 127
Total pages 11
Place of publication Chatswood, NSW, Australia
Publisher Elsevier
Collection year 2016
Language eng
Abstract The incentive regulation of costs related to physical and cyber security in electricity networks is an important but relatively unexplored and ambiguous issue. These costs can be part of cost efficiency benchmarking or, alternatively, dealt with separately. This paper discusses the issues and proposes options for incorporating network security costs within incentive regulation in a benchmarking framework. The relevant concerns and limitations associated with the accounting and classification of network security costs, choice of cost drivers, data adequacy and quality and the relevant benchmarking methodologies are discussed. The analysis suggests that the present regulatory treatment of network security costs using benchmarking is limited to being an informative regulatory tool rather than being deterministic. We discuss how alternative approaches outside the benchmarking framework, such as the use of stochastic cost-benefit analysis and cost-effectiveness analysis of network security investments can complement the results obtained from benchmarking.
Keyword Benchmarking
Exceptional events
Incentive regulation
Network security
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Non HERDC
School of Agriculture and Food Sciences
 
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Created: Tue, 12 Jan 2016, 11:44:22 EST by Rabindra Nepal on behalf of School of Agriculture and Food Sciences