EFFICIENCY AND SERVICE QUALITY ANALYSIS OF THE 

TURKISH NATURAL GAS DISTRIBUTION COMPANIES

Authors : 

Okan YARDIMCI, Prof. Dr. Mehmet Baha Karan

Work-in-progress paper (2013Multinational Energy & Value Conference)

Energy Market Regulatory Authority (EMRA) sets the tariff that determines the revenue requirements of the Turkish natural gas distribution companies by using a popular type of an incentive regulation, price cap method. Incentive regulation improves efficiency and reduce costs, on the other hand the companies may not be willing to increase the service quality in this kind of regulation. This paper analysis the efficiency and service quality of the Turkish natural gas distribution companies. The companies’ efficiency scores are evaluated both by non-parametric and parametric methods, Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) respectively. The same distribution companies are ranked by the service quality scores that obtained from the service quality data. The results are used to determine the relationship between efficiency and service quality of the companies, to decide the effectiveness of the regulation and to suggest a reward/penalty scheme for the tariff design.

2013 Multinational Energy & Value Conference