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.