Regulatory Schemes and Investment Behavior in Transmission of Electricity: The Case of Argentina

Abstract

The objective of this paper is to analyze the impact of the Argentinian regulation on the expansion of the network for high voltage electricity. Argentina reorganized its electricity industry in 1992, including the transmission network and adopted a new regulatory framework. The results for investment in transmission network have been mixed so far. The new regulations apparently have not triggered the investment necessary to eliminate local bottlenecks in the transmission system. The persistence of these problems hinders the capability of the industry to ensure reliable and economical electricity in the long run. This paper attempts to explain the reasons for these mixed results.