Annual Report 2011-2012

Annual Research Report 2011-2012
Project Title:
Developing the regulatory system in Iran electricity
distribution sector
Department: Electricity management and Economics
Employer: Ministry of Energy
Project Manager: Behshad Azodi
Project Code: CMADE01
Project staff: E.Ahmadi, M.Farhadkhani, B.Mokhtarpour; A.Fereydonian; H.Falah, S.Mehdizade
Project Summary:
Restructuring and privatization in Iran electricity distribution sector has begun by the
law of independence of distribution companies, this law serves as an introduction to
privatization of distribution companies and unbundling its competitive parts like
retailing from the natural monopoly parts like wiring.
Although, eliminating the government from the ownership and administration of the
distribution companies improves the performance and increases the investment in this
sector, being natural monopoly in distribution or wiring function makes worries about
how to protect the short term and long term interests of customers and other
stakeholders. Global experiences recommend that developing an effective regulatory
system as a governance tool can provide the basis for the privatization of companies and
reply to the subsequent concerns.
A professional regulatory regime, via making rules and monitoring the market entrance,
prices, quality of services and etc, balances the interests of the customers as well as
distribution companies, investors and government. Due to the importance of electricity
industry regulation, most countries established independent bodies that are responsible
for regulatory functions.
Therefore, with the aim of designing the regulatory framework of Iran electricity
distribution sector, a project entitled "Developing the regulatory system in Iran
electricity distribution sector" was accomplished at “electricity economic and
management” group of Niroo research center.
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