Ceris-CNR Working paper 13/97

COSTS, TECHNOLOGY AND OWNERSHIP FORM OF NATURAL GAS DISTRIBUTION IN ITALY

Giovanni Fraquelli
Ceris-CNR, University of Turin

Roberto Giandrone
Italgas S.p.A.

July 1997

Abstract

The analysis of the technology and costs of the gas distribution networks highlights that the number of customers is more important than the amount of gas delivered, as well as the absence of economies of scale, the presence of economies of density and the significant role of the morphologic and demographic variables. The diversification towards other services, such as water and electricity, provides good opportunities for efficiency. The lower costs for private operators and the constant economies of scale indicate that the privatisation process should continue and confirm the benefits of having many operators (yardstick competition). The control of monopoly rents in efficient conditions requires the use of a tariff system similar to a price-cap, provided that it takes into account the territorial constraints.

Jel Classification: L33; L95
Key words: Gas utilities, Costs, Public and private enterprise

SCARICA QUESTO WP

WP 13/1997