Do Size and Ownership Matter for the Economic Efficiency of Electric Utilities? Canadian Evidence from Newfoundland and Labrador

• Published in: Energy Studies Review
• Main Author: Wernerheim, C. Michael
• Format: Article in Journal/Newspaper
• Language: English
• Published: ESR 2006
• Subjects: Canada; Newfoundland
• Online Access: https://energystudiesreview.ca/esr/article/view/501; https://doi.org/10.15173/esr.v14i2.501

This paper investigates differences in cost structure between large public, small public, and small private electric utilities in Newfoundland and Labrador, Canada . The objective is to examine whether scale and owners hip structure matter for productive efficiency. We use estimated share equations from translog cost functions to calculate elasticities of input demand and substitution, technical change, scale economics, and perform a goodness-of-fit ' test ' of economic efficiency . Much of the evidence in the literature favour private owners hip on efficiency grounds . In the case of Newfoundland and Labrador, this study does not. We offer several plausible explanations for this finding that generalize beyond this sample.