Abstract

This paper analyzes the price regulation system of electricity supply to final industrial customers proposed by the Regulatory Autority for electricity and gas in Italy. The aim of the paper is to evaluate the effects of the system on the efficiency of distribution companies and on the discrimination between consumers characterized by different demand functions. We will show how geographical conditions, informative and normative constraints reduce the power of incentive proposed price system and might generate "excessive" discrimination between consumers. Some suggestions for the improvement of the system are offered.