Total expenditure estimation (TOTEX) of electricity distribution companies by means of reference network and of efficiency frontier models

Abstract

A methodology for the estimation of total expenditure (TOTEX) that permits distribution companies to quantify the possible improvement margins to accomplish regulatory requirements. is proposed. TOTEX estimation, associated with the electricity distribution activity is a dynamic issue due to the changing conditions of its economic and regulatory environment. Consequently, distribution companies require tools that allow them to face these challenges. To this aim, the proposed methodology integrates reference network and efficiency frontier models. The use of the methodology is illustrated in a distribution system with approximately 231000 clients. Tests show that the proposed methodology can be adapted to the changing environment since it can integrate market and technological issues.