Structural,governance, & regulatory incentives for improved utility performance: A comparative analysis of electric utilities in Tanzania,Kenya, and Uganda

Public utilities in most African countries have failed to deliver adequate, reliable, and competitively priced electricity to support economic growth and improve the welfare of their populations. Despite more than two decades of power sector reforms, outcomes have been varied and often disappointing. A comparative case study analysis of electric utilities in three East African countries (Tanzania, Kenya, and Uganda) explores the drivers of utility performance. Findings show that Tanzania Electric Supply Company Limited performed the worst. Kenya Power performed better, while Umeme is the most financially sustainable of the three utilities. However, this ranking among the three utilities is inconsistent across all performance measures. PSP is widespread and brings in much-needed investments in generation and distribution. Countries that restructured their power systems have reduced conflicts of interest, enabled deeper management focus, improved transparency and accountability, and built institutional capacity that translates into improved utility performance. One of our major conclusions is that despite improved governance in market-oriented power markets, consistent regulatory decision-making for cost-reflective tariffs and adequate indexation is still necessary to guarantee financial viability and sustainability.     

Re-examining the ‘low water tariff’ hypothesis: lessons from Hyderabad,India

Researchers suggest urban water utilities in India operate on low tariffs, consequently earning revenue insufficient to recover operation and management (O&M) costs of water storage, treatment and distribution. From findings of a field study conducted in Hyderabad, India, the paper suggests otherwise. While ‘stated’ tariffs are low, households currently pay tariffs far higher than in other regions of the world because of institutional indifference toward improving service attributes, particularly quantity and poor measurement of domestic water consumption; following which, poor communities pay more for less. While poor cost recovery precludes improved performance of urban water utilities, targeting this facet alone at the cost of other aspects of service does not, as the paper demonstrates, necessarily lead toward qualitative service improvement or toward improved households' perception of water services.     

Utility and regulatory decision-making under conditions of uncertainty: Balancing resilience and affordability

Public utilities and their regulators frequently make decisions in conditions of uncertainty, where it can be difficult to confidently assign probabilities to possible future states. Choices can be particularly challenging where a utility faces requirements both to ensure that a system is resilient in terms of meeting service levels and quality standards, and that utility rates are affordable. This paper explores how utilities and regulators might respond to uncertainty, and sets out a menu of factors to guide decision-making. The paper also identifies some challenges for utilities and regulators in adapting their decision-making to account for uncertainty, balancing the objectives of resilience and affordability, determining who should make judgments in relation to this balance (consumers, regulators or experts), and allocating the risks associated with uncertainty across different parties (utilities, consumers, or taxpayers).     

Efficient resource utilization of the electricity distribution sector using nonparametric data envelopment analysis and influential factors

This study aims to investigate the efficient resource utilization of the electricity distribution sector in Pakistan and identifies the influential factors affecting it. In Pakistan, there is excess production capacity and under-utilized power plants, which pose a challenge to the economy due to their burden on the exchequer account and the high power costs. The present study employs the most recent 11 distribution firms panel data from Pakistan for the period 2016–2020 to evaluate the performance ranking of distribution utilities. The study employs standard frontiers, composite indexes, and a novel DEA-windows analysis to measure the efficiency of the distribution utilities. The results of the analysis show that electricity sales, consumer density, and industrial consumers have a positive impact, while distribution losses have a negative association with the efficiency of the distribution utilities. These findings provide valuable insights for policymakers and industry stakeholders in improving the resource utilization and overall performance of the electricity distribution sector. The study highlights the implications of the results in terms of reducing greenhouse gas emissions, which are one of the main contributors to global warming. In conclusion, this study provides an essential contribution to the literature on efficient resource utilization in the electricity distribution sector in Pakistan.     

Implications of organic carbon in the deterioration of water quality in reclaimed water distribution systems

Changes in water quality in reclaimed water distribution systems are a major concern especially when considering the potential for growth of pathogenic microbes. A survey of 21 wastewater process configurations confirmed the high quality effluent produced using membrane bioreactor (MBR) technology, but suggests that other technologies can be operated to produce similar quality. Data from an intensive twelve-month sampling campaign in four reclaimed water utilities revealed the important trends for various organic carbon parameters including total organic carbon (TOC), biodegradable dissolved organic carbon (BDOC), and assimilable organic carbon (AOC). Of the four utilities, two were conventional wastewater treatment with open reservoir storage and two employed MBR technology with additional treatment including UV, ozone, and/or chlorine disinfection. Very high BDOC concentrations occurred in conventional systems, accounting for up to 50% of the TOC loading into the system. BDOC concentrations in two conventional plants averaged 1.4 and 6.3 mg/L and MBR plants averaged less than 0.6 mg/L BDOC. Although AOC showed wide variations, ranging from 100 to 2000 μg/L, the AOC concentrations in the conventional plants were typically 3-10 times higher than in the MBR systems. Pipe-loop studies designed to understand the impact of disinfection on the microbiology of reclaimed water in the distribution system revealed that chlorination will increase the level of biodegradable organic matter, thereby increasing the potential for microbial growth in the pipe network. This study concludes that biodegradable organic carbon is an important factor in the microbial quality and stability of reclaimed water and could impact the public health risk of reclaimed water at the point of use.     

Overcoming missing data bias in water utility indicators by using nested balanced panels

This paper demonstrates a methodology for calculating trends in unbalanced panel nonrandom sample datasets, using the International Benchmarking Network for Water and Sanitation Utilities (IBNET) dataset on more than 5000 utilities. The methodology can be used for any dataset and calculates the change, or delta, between the same unit of observation (in this case, a utility) over two consecutive years and nests these deltas to calculate an average trend for a given variable over the longest time horizon possible. We use this method to show trends in water utilities’ performance between 2004 and 2015 at a global level and to reveal differences in performance between groups of utilities. For the sake of comprehensiveness, the representativeness of IBNET is also discussed to provide more context to the dataset used. A probit analysis, conducted to shed light on the representativeness of utilities in the IBNET dataset over time, reveals that the utilities that reported their data in earlier years, in general, have a higher number of connections and perform better than the utilities that reported their data in later years. This implies that over the years, as the number of utilities reporting their data increases, more utilities outside of the bigger (more connections) and better performing utilities start reporting. In other words, in the earlier years it is the bigger and better performing utilities that first report data. In the later years, the smaller and not so well performing utilities also start reporting their data.     

Social equity implications of advanced water metering infrastructure

Many water utilities across the United States have recently launched efforts to replace household water meters with advanced metering infrastructure (AMI), or “smart meters,” to track and bill water use. In this exploratory research article, we use interviews and water utility data, and we review scholarly and grey literature to present five equity implications of AMI transitions: affordability, job loss, access and use of the technology, trust between households and utilities, and communications are ways residents can experience harm. These implications illustrate that AMI can disproportionately burden residents and highlight water utilities’ critical role as community institutions.     

Sampling and quantifying invertebrates from drinking water distribution mains

Water utilities in the Netherlands aim at controlling the multiplication of (micro-) organisms by distributing biologically stable water through biologically stable materials. Disinfectant residuals are absent or very low. To be able to assess invertebrate abundance, methods for sampling and quantifying these animals from distribution mains were optimised and evaluated. The presented method for collecting invertebrates consists of unidirectionally flushing a mains section with a flow rate of 1 ms(-1) and filtering the flushed water in two separate flows with 500 microm and 100 microm mesh plankton gauze filters. Removal efficiency from mains was evaluated in nine experiments by collecting the invertebrates removed from the mains section by intensive cleaning immediately subsequent to sampling. Of 12 taxa distinguished, all except case-building Chironomidae larvae (2%) and Oligochaeta (30%) were removed well (51-75%). Retention of invertebrates in 100 microm filters was evaluated by filtering 39 filtrates using 30 microm filters. Except for flexible and small invertebrates such as Turbellaria (13%), Nematoda (11%) and Copepoda larvae (24%), most taxa were well retained in the 100 microm filters (53-100%). During sample processing, the method for taking sub-samples with a 10 ml pipette from the suspension of samples with high sediment concentrations was found to perform well in 75% of the samples. During a 2-year national survey in the Netherlands and consecutive investigations, the method appeared to be very suitable to assess the abundance of most invertebrate taxa in drinking water distribution systems and to be practicable for relatively inexperienced sampling and lab technicians. Although the numbers of small, less abundant or sessile taxa were not accurately assessed using the method, these taxa probably should not be the primary focus of monitoring by water utilities, as consumer complaints are not likely to be caused by these invertebrates. The accuracy of quantifying small invertebrates was further improved, however, by filtering the 100microm filtrate with a 30microm mesh plankton gauze filter.     

The effects of ownership,board size and board composition on the performance of Italian water utilities

This article analyses the effects of ownership, board size and composition on the performance of 72 Italian water utilities. Information about the utilities' 335 directors was collected. Our main findings indicate that private or mixed-ownership utilities show higher profitability than entirely publicly-owned firms, even if the latter are less debt-dependent. Furthermore, our results show that the boards of Italian water utilities are dominated by politically connected directors, who boost access to debt and negatively affect the firms' capital structures. This study also shows that board composition, in terms of the age and educational background of members, influences economic performance, since graduate and senior directors exert a negative influence on profitability.     

A multi-criteria decision analysis method for regulatory evaluation of electricity distribution service quality

This study aims to evaluate the performance of electricity distribution utilities with the use of a single global index based on a Multi-Criteria Decision Analysis (MCDA) method. The proposed approach allows the ranking of service quality according to three dimensions: supply continuity, voltage conformity and customer satisfaction. The challenge of aggregating various indicators into a single global index was overcome with the Analytic Hierarchy Process (AHP) and Preference Ranking Organization Method for Enrichment Evaluations (PROMETHEE) methods. This ranking facilitates regulatory assessment of the distributors' performance, and thus improves the quality of services offered by utilities.     

Results of an urban water distribution network performance evaluation attempt in Greece

The need for efficient water resources management is currently more pressing than ever, considering population growth and increased reliability requirements, under climate change conditions. On average, one-third of the total water abstracted for urban uses is being lost due to leaks and breaks occurring in water distribution networks. This means that significant amounts of water and revenues are being lost, forcing water utilities to consider developing effective water loss and Non-Revenue Water reduction strategies. Additionally, all water utilities operating in EU countries should, by the end of 2010, develop and implement appropriate water pricing policies that will guarantee the recovery of the full cost of the water being used. This strict obligation makes the reduction of water losses an even more urgent goal that the water utilities have to achieve. The first step towards all the above-mentioned goals is to safely evaluate the performance level of the water network. Thus, the IWA Task Forces on Water Losses and Performance Indicators (PIs) developed specific tools (e.g., the standard international water balance and various PIs), to help water utilities use a common language that will assist know-how and experience exchange through an effective benchmarking process. The paper presents the results of using the above-mentioned IWA tools, in the case of the Larisa city water distribution network in Greece. This is the first time that such an attempt has taken place in Greece. During this process, the problems faced and the ways to tackle them are analyzed, focusing on the role of key factors that had to do with local conditions. Larisa's results are compared to data available from similar cases. Sensitivity analysis was used to check the impact of the variables' uncertainty to the results. Finally, water loss reduction measures are proposed towards an effective pressure management strategy and a proactive pipe maintenance policy based on safely estimating the pipes' optimum replacement time.     

Pricing of electricity distribution: an empirical efficiency study in Finland,Norway and Sweden

The Nordic countries have long experience of a liberalized electricity sector. The monopoly operations—namely, distribution and transmission of electric energy—are regulated in an attempt to prevent monopoly rents and to induce improvements in efficiency. This paper presents the main results of an empirical study on network pricing in Finland, Norway and Sweden, with special focus on efficiency in the performance of the utilities. The results of this efficiency study indicate that there is in theory great potential for cost saving in Nordic electricity distribution.     

Efficiency of urban water supply in Sub-Saharan Africa: Do organization and regulation matter?

Using the model developed by Battese and Coelli (1995), we compare the technical efficiency of urban water utilities in Sub-Saharan Africa countries. We examine how private-sector participation, economic regulation, and their combination affects technical efficiency. We find that regulating water utility operations via performance contracts leads to higher technical efficiency compared to control by an independent regulatory agency. Private-sector participation in management has a positive effect on technical efficiency. However, there is no evidence of a statistically significant difference between the technical efficiency of publicly and privately owned utilities, respectively, when they are regulated by either an independent agency or a performance contract.     

Promoting the urban utilities tunnel technique using a decision-making approach

Urban development and the need for new facilities have led to an increase in the use of urban utilities. These various utilities are generally located under the public highway. Therefore, underground space is limited by the width of the public highway. Because of the increase in urban utilities, the need for maintenance of these utilities and the lack of space, the underground is now very often saturated. Sometimes, the situation is so inextricable and so anarchic that the implementation of a new urban network becomes hardly possible. In addition, trench digging due to work on existing networks or on the addition of a new network generates much traffic interruption. To solve this problem, an urban utilities tunnel can be used. In this case, all the urban utilities are located in a single tunnel. Thus, saturation of the underground space decreases, there are fewer errors in the zone plan used, maintenance is easier, there is no traffic interruption and it is possible to add a new urban network without disrupting the public highway. However, the urban utilities tunnel is expensive compared to classical solutions. Because decision-makers only work based on economic criteria, this solution is rarely chosen. Therefore, to promote the urban utilities tunnel in France, a national research project was created. One of its goals is to develop a multicriteria method integrating the following criteria: safety, sustainable development, economy, maintenance, risk analysis, development facilities… Moreover, the sewer network seems to induce most of the constraints. Thus, another goal is to study the influence of the drainage network location (inside or outside the tunnel) on the general cost of the urban utilities tunnel. This paper details both problems.     

A smart meter data-driven distribution utility rate model for networks with prosumers

Distribution grids across the world are undergoing profound changes due to advances in energy technologies. Electrification of the transportation sector and the integration of Distributed Energy Resources (DERs), such as photo-voltaic panels and energy storage devices, have gained substantial momentum, especially at the grid edge. Transformation in the technological aspects of the grid could directly conflict with existing distribution utility retail tariff structures. We propose a smart meter data-driven rate model to recover distribution network-related charges, where the implementation of these grid-edge technologies is aligned with the interest of the various stakeholders in the electricity ecosystem. The model envisions a shift from charging end-users based on their KWh volumetric consumption, towards charging them a grid access fee that approximates the impact of end-users’ time-varying demand on their local distribution network. The proposed rate incorporates two cost metrics affecting distribution utilities (DUs), namely magnitude and variability of customer demand. The proposed rate can be applied to prosumers and conventional consumers without DERs.     

Revising the existing Performance Indicator system for small water supply utilities in Japan

97.5% of the water utilities in Japan serve less than 50,000 customers, and are called small water utilities. The Performance Indicator system in Japan, used to evaluate the performance of various aspects of the supply system, currently has 137 items, which are too many in number for the small utilities to adopt because of resource and financial constraints. The objective of this study is to, thus, revise the existing PI system to arrive at a reduced, relevant and practical structure that provides enough information to rationally evaluate small water supply systems in Japan. Principal Component Analysis was used to reduce the dimensionality of the original data. The results suggest that only nine components, consisting of 33 items (called 9-cPIS), are sufficient for evaluating the small water utilities. The effectiveness of the 9-cPIS in benchmarking, evaluating business models, and the planning and management of the water utilities has been discussed further.     

Travel mode choice as a representation of travel utility: A multilevel approach reflecting the hierarchical structure of trip,individual, and neighborhood characteristics

Trip characteristics, travel utility, socio-economic characteristics, and built environment influence travel mode choice. Since the elements have a hierarchical structure, this study conducted multilevel multinomial logistic regression to evaluate the relationship between these elements and travel modes. Particularly, this study focused on how twelve types of expressed travel utilities affect travel mode choice for five travel purposes. The results show that people consider various travel utilities for each travel purpose; these elements influence the travel mode choice of cars, public transit, or non-motorized modes, for example, public transit is preferred for punctuality and multitasking in commute, and for health benefits in shopping.     

A composite indicator for measuring the environmental performance of water,wastewater, and solid waste utilities

The aim of this paper is to measure and benchmark the environmental performance of Portuguese utilities jointly active in the three sectors of water supply, wastewater collection and solid waste management. To do so, we suggest the use of a traditional (optimistic) directional distance Benefit of the Doubt index. We complement the analysis by considering also the pessimistic version of the proposed BoD and by implementing a robust and conditional approach. The obtained results show that there is space for improvement in the pressure balance of these utilities, especially for small and very large units, mostly operating in urban areas.     

The role of efficiency estimates in regulatory price reviews: Ofgem's approach to benchmarking electricity networks

Electricity regulators around the world make use of efficiency analysis (or benchmarking) to produce estimates of the likely amount of cost reduction which regulated electric utilities can achieve. This short paper examines the use of such efficiency estimates by the UK electricity regulator (Ofgem) within electricity distribution and transmission price reviews. It highlights the place of efficiency analysis within the calculation of X factors. We suggest a number of problems with the current approach and make suggestions for the future development of X factor setting.