Approach On Efficiency Evaluation And Index Selection For Electricity Distribution Utilities

This paper discusses the efficiency evaluation methods of electricity distribution utilities and the simplification of evaluation indices.Establishing an effective performance evaluation method and market driven incentive mechanism is an important subject that the electric power utilities are currently facing with. Data Envelopment Analysis (DEA),Stochastic Frontier Analysis (SFA) and Corrected Ordinary Least Square (COLS) methods are used to evaluate electricity distribution utilities'efficiency. The validity of the DEA model is verified and validated by SFA and COLS methods. In addition, the improvement schemes are given for those relative low efficient utilities. Super-efficiency DEA model is proposed to rank every evaluated utility. At last, a kind approach of sensitivity analysis and a method to simplify the evaluation indices are presented. This research is expected to provide theoretical guideline for electricity regulation department, also to the manager of electricity utilities for decision-making.