performance indicators for distribution system operators roberto malaman general manager
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PERFORMANCE INDICATORS FOR DISTRIBUTION SYSTEM OPERATORS Roberto Malaman General Manager Autorità per l’energia elettrica e il gas This is not an official document of the Italian Regulatory Authority for Electricity and Gas. NON-PRICE REGULATION FOR DSOs. - PowerPoint PPT PresentationTRANSCRIPT
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Autorità per l’energia elettrica e il gas
PERFORMANCE INDICATORS FOR DISTRIBUTION SYSTEM
OPERATORS
Roberto Malaman
General ManagerAutorità per l’energia elettrica e il gas
This is not an official document of the Italian Regulatory Authority for Electricity and Gas
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Autorità per l’energia elettrica e il gas
NON-PRICE REGULATION FOR DSOs
UTILITY REGULATION SHOULD EXPLICITLY INCLUDE NON-PRICE RULES
THESE ARE EVEN MORE NECESSARY IF:THE BUSINESS HAS BEEN PRIVATIZEDPRICE-CAP REGULATION HAS BEEN
INTRODUCEDCOMPETITION FOR THE MARKET
(COMPETITIVE CONTRACTING) HAS BEEN INTRODUCED
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Autorità per l’energia elettrica e il gas
INPUTS OR OUTPUTS REGULATION?
REGULATION FOCUS IS SHIFTING TOWARD OUTPUTS
REGULATORS SHOULD AVOID TO FORCE TECHNICAL SOLUTIONS OR DECIDE INVESTMENT PLANS
FOCUS ON INPUTS IS WELCOME IF OUTPUTS ARE NOT EASILY MEASURABLE/CONTROLLABLE
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Autorità per l’energia elettrica e il gas
PERFORMANCE INDICATORS AND STANDARDS LEAGUE TABLES (BENCHMARKS): PUBLICATION
OF QUALITY PERFORMANCE (ACTUAL LEVELS) GUARANTEED STANDARDS
TO GUARANTEE A MINIMUM QUALITY THRESHOLD TO EACH SINGLE CUSTOMER
OVERALL STANDARDSTO GUARANTEE A MINIMUM QUALITY THRESHOLD TO THE AVERAGE OF CUSTOMERS
NON-PRICE REGULATION IS MAINLY BASED ON PERFORMANCE STANDARDS: APPROPRIATE PERFORMANCE INDICATORS HAVE TO BE DEFINED, MEASURED, AND CONTROLLED
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Autorità per l’energia elettrica e il gas
NON-PRICE FACTORS REGULATION PHASES
PR
ES
SU
RE O
N C
OS
TS
MARKET FOR DISTRIBUTION LICENCES HIGHLOW
HIGH
Technical Standards + Self
Regulation
+ Performance
Standards
+ Economic Incentives
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Autorità per l’energia elettrica e il gas
REGULATION IS BASED ON TECHNICAL STANDARDS AND RULES
TECHNICAL BODIES MAKE MOST OF THE JOB
CO-OPERATIVE SELF REGULATION PREVAILS
NON-PRICE REGULATION IN ITALY Stage 1 (until 2000)
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Autorità per l’energia elettrica e il gas
REGULATION IS BASED ON STANDARDS OF PERFORMANCECOMMERCIAL QUALITY OVERALL AND
GUARANTEED STANDARDS (since 2001)MEASUREMENT RULES FOR LEADING SAFETY
AND CONTINUITY FACTORS (since 2001)SAFETY AND CONTINUITY INDEXES FOR
EACH DISTRIBUTION PLANT (since 2002)OVERALL SAFETY STANDARDS (since 2002)
NON-PRICE REGULATION IN ITALY Stage 2 (2001-2003)
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Autorità per l’energia elettrica e il gas
COMMERCIAL QUALITY REGULATION Guaranteed and overall standards
Service Distribution Supply Estimate for simple works Connection (simple works) Providing supply Suspending supply Restoring supply to defaulting customers
Guaranteed standards
Personalized appointments Estimate for complex works Connection (complex works) Checking meter Checking pressure Complaints Invoice amendments
General standards
Reading of consumption
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Autorità per l’energia elettrica e il gas
PIPES INSPECTED BEFORE REGULATION
0
10
20
30
40
50
60
70
80
90
100
Average Italy
YEARLY PERCENTAGE OF LOW PRESSURE PIPES INSPECTED – 1999
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Autorità per l’energia elettrica e il gas
SAFETY REGULATION 2001-2003Overall standards
SAFETY INDICATOR OVERALL
STANDARDS
OPTIMUM QUALITY LEVELS
PERCENTAGE OF HIGH AND MEDIUM PRESSURE PIPES INSPECTED
30% 90%
PERCENTAGE OF LOW PRESSURE PIPES INSPECTED
20% 70%
NUMBER OF LOCALIZED LEAKAGES PER KM OF PIPES
0,8 0,1
CONVENTIONAL NUMBER OF GAS ODORIZATION LEVEL MEASUREMENTS PER THOUSAND OF CUSTOMERS
ODmin (see paragraph
9.4 of Reg. Order 236/00)
0,5
Compulsory minimum overall standards
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Autorità per l’energia elettrica e il gas
REGULATION EFFECTS (1)PERCENTAGE OF PIPES INSPECTED 1997-2006(Mandatory Targets: LP 20%/year; HP/MP 30%/year)
0%
10%
20%
30%
40%
50%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
BP AP/MP
NO REGULATION REGULATION
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Autorità per l’energia elettrica e il gas
REGULATION EFFECTS (2)PROMPT INTERVENTION
0
5
10
15
20
25
30
35
40
45
50
2001 2002 2003 2004 2005 2006
Av
era
ge
ac
tua
l ti
me
(m
in)
100.000
120.000
140.000
160.000
180.000
200.000
220.000
240.000
260.000
280.000
300.000
Nu
mb
er
of
ca
ll
minutes
n. of calls
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Autorità per l’energia elettrica e il gas
REGULATION IS BASED ON BOTH STANDARDS AND ECONOMIC INCENTIVES
BOTH OF THEM ARE BASED ON PERFORMANCE INDICATORS
2004-2005: SOME ECONOMIC PENALTIES HAVE BEEN INTRODUCED:SANCTIONS FOR VIOLATION OF AEEG
DIRECTIVES(NEW) ECONOMIC PENALTIES FOR
VIOLATION OF THE OVERALL STANDARD FOR PROMPT INTERVENTION
NON-PRICE REGULATION IN ITALY
Stage 3 (2004-2008)
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Autorità per l’energia elettrica e il gas
ECONOMIC PENALTY ON PROMPT INTERVENTION STANDARD VIOLATION
SAFETY INDICATOR BASIS
THRESHOLD REFERENCE THRESHOLD
PERCENTAGE OF PROMPT INTERVENTION CALLS WITH ARRIVAL ON SITE WITHIN 60 MINUTES
90% 95%
TIME FOR SAFETY RESTORATION IN CASE OF MAIN LEAKAGES
M M
Compulsory minimum threshold
basis threshold = acceptable quality levelreference threshold = optimum quality level
500 Euro penalty for each intervention later than 60 minutes
Monitoring
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Autorità per l’energia elettrica e il gas
ECONOMIC PENALTIES WORK
… but
SANCTIONS AND PENALTIES PUSH DISTRIBUTORS TO COMPLY WITH MINIMUM THRESHOLDS, NOT TOWARD CONTINUOUS
IMPROVEMENT
INCENTIVES MAY BE USED TO THIS PURPOSE
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Autorità per l’energia elettrica e il gas
RELEVANT INDICATORS FOR SAFETY INCENTIVES UNDER CONSIDERATION FOR ECONOMIC INCENTIVES:
1. GAS ODOURIZATION MEASUREMENT
2. LEAKAGES LOCALIZATION AND ELIMINATION
3. PROMPT INTERVENTION
4. CATHODIC PROTECTION OF STEEL PIPES
RELEVANT INDICATORS FOR SAFETY INCENTIVES
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Autorità per l’energia elettrica e il gas
INCENTIVE SCHEME
TARGETS MORE ODOURIZATION LEVEL MEASUREMENTS LEAKS REDUCTION (CONVERGENCE)
SEPARATE ECONOMIC INCENTIVES FOR: ADDITIONAL YEARLY GAS ODOURIZATION LEVEL
MEASUREMENTS LEAKS REDUCTION (ANNUAL NUMBER OF LEAKS
POINTED OUT BY CUSTOMERS) ECONOMIC INCENTIVES ARE NOT RECOGNIZED IN
CASE OF INCIDENT DUE TO DISTRIBUTOR’S LIABILITY 1-2% OF ADDITIONAL REVENUES ALLOWED TO DNOs
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Autorità per l’energia elettrica e il gas
ITALIAN INCENTIVE SCHEME: A GRADUAL APPLICATION
A LONG-TERM PROCESS (11 YEARS)
2006-2008: FIRST APPLICATION AND TESTING STAGE • VOLUNTARY PARTICIPATION• ONLY BONUSES• RESULTS’ ASSESSMENT BEFORE THE END OF 2008
2009-2016: COMPLETE INCENTIVE SCHEME• COMPULSORY REGIME• BONUSES AND PENALTIES
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Autorità per l’energia elettrica e il gas
THE LEAKAGE COMPONENT (1)
CALCULATION OF VARIABLE ALPHAJ FOR EACH DISTRIBUTION SYSTEM J ELIGIBLE FOR LEAKAGE BONUSES
ALPHAJ EXPRESSES THE ANNUAL RATE OF IMPROVEMENT REQUIRED TO BRING THE DISTRIBUTION SYSTEM J, OVER THE COURSE OF THREE REGULATORY PERIODS (11 YEARS), FROM THE BASELINE LIVPARTJ TO THE TARGET LEVEL LIVOBK
ALPHAJ IS CALCULATED AS FOLLOWS:
WHERE ALPHAJ ≤ 20%
%2;1max
11
1
j
k
j LivPart
LivOb
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Autorità per l’energia elettrica e il gas
CONVERGENCE TOWARD NATIONAL TARGETS DIFFERENT TARGETS FOR HIGH, MEDIUM AND
LOW CONCENTRATION AREAS
0
5
10
15
20
25
30
35
40
Year
Inte
rmed
iate
leve
l
1
2
THE LEAKAGE COMPONENT (2)
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Autorità per l’energia elettrica e il gas
THE IMPORTANCE OF CONTROLS
DATA ON PERFORMANCE INDICATIORS ARE PROVIDED BY DISTRIBUTORS
ECONOMIC INCENTIVES ARE RECOGNIZED ONLY AFTER SUITABLE CONTROLS
THE REGULATOR MUST CONTROL THAT DATA ARE RECORDED IN A COMPLETE AND SATISFACTORY MANNER, ACCORDING TO THE MEASUREMENT RULES
INDEPENDENT AUDITS COULD BE INTRODUCED
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Autorità per l’energia elettrica e il gas
ITALIAN INCENTIVE SCHEME:INITIAL RESULTS (2006)
28 DISTRIBUTORS (ON A TOTAL OF 400) REQUESTED ECONOMIC INCENTIVES FOR THE IMPROVEMENT OF THEIR PERFORMANCES IN 2006
8 OF THEM (ON A TOTAL OF 25) ARE BIG DISTRIBUTORS (MORE THAN 100.000 CLIENTS)
DISTRIBUTORS HAVE REQUESTED: FOR ABOUT 270 DISTRIBUTION PLANTS BOTH
INCENTIVE COMPONENTS FOR ABOUT 140 PLANTS ONLY THE
COMPONENT RELATED TO ADDITIONAL YEARLY GAS ODOURIZATION LEVEL MEASUREMENTS
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Autorità per l’energia elettrica e il gas
CONCLUSIONS
NON-PRICE REGULATION IS BASED ON:PERFORMANCE INDICATORSPERFORMANCE STANDARDSECONOMIC INCENTIVES
RULES FOR PERFORMANCE INDICATORS MEASUREMENT, REGISTRATION AND CONTROL ARE NEEDED
REGULATION HAS TO BE BASED ON A SHORT LIST ON INDICATORS; COMPANIES NEED MORE
REGULATORS AND COMPANIES SHOULD USE SOME COMMON INDICATORS