An application of data envelopment analysis to evaluate the efficiency level of the operational cost of Brazilian electricity distribution utilities

• The performance of Brazilian electricity sector is measured by three DEA models.
• The Kohonen Neural Networks is proposed to classify comparable firms.
• One criteria for selecting the influential observations in each group is presented.
• We used the adjusted contingent weight restrictions approach to avoid zero weights.

This paper shows efficiency indices for 60 Brazilian electricity distribution utilities. The efficiency scores are gauged by three DEA models. For both models, these quantities are evaluated under different contexts. One treats with respect to the regulator perspective. The others examine an alternative approach based on cluster analysis and restrictions on factor weights. It is worth pointing out that these developments can reduce the information asymmetry and improve the regulator's skill to compare the performance of the utilities, a fundamental in incentive regulation schemes.