M9 - OPEX and Benchmark Analysis

Learning Objectives

In this module we will continue to talk about the fundamentals of transmission/distribution network pricing. The learning outcomes of this week are:

• Explore another mode of incentive-based regulation: yardstick or benchmark analysis;
• Understand the Data Envelopment Analysis (DEA) model and its variations regarding returns to scale;
• Introduce the concept of duality theory in LP;
• Evaluate performance of electric utilities for case study with 20 utilities.

Slides

Here is a link to the slide deck used in class.

Recordings

• Intro OPEX
• DEA Model Formulation - Multiplier
• DEA Duality Theory
• DEA Model Formulation - Envelopment
• Assignment Instructions

Resources

Additional resources and readings on benchmark analysis.

• DEA Constant Returns to Scale
• DEA Variable Returns to Scale

Topics for Discussion/Reflection

Deliverables

For this module you will complete Assignment 4. The due date for A4 is Friday Nov 17.