Impact of Regulation on the Quality of Electric Power Distribution Services in Latin America and the Caribbean

This study discusses the impact of regulation on improving the quality of electricity supply in LAC countries. For this purpose, an econometric model is applied using public data available from regulators and electricity companies of each country to analyze the impact of quality regulation measures on the average duration of interruptions per customer/year (SAIDI), the average frequency of interruptions per customer/year (SAIFI), and equivalent indicators, in addition to the influence of other companies' characteristics. We show that between 2000 and 2019, improvements in the continuity of electricity supply were observed for the nine countries studied: Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Panama, and Peru. During this same period, several countries adopted regulatory instruments to measure quality indicators and establish minimum standards or incentives to reduce interruptions in the electricity supply, contributing to the decrease of SAIDI and SAIFI. In particular, our results show the effectiveness of regulatory instruments to improve the quality of electricity services. From a sample of 143 electricity distributors, we estimate that the average SAIDI has decreased by 40% and the average SAIFI by 45%.