Efficiency benchmarking and remuneration of Spanish electricity distribution companies

In Spain, the average remuneration of large electric distribution companies is much lower than that of smaller ones, which leads us to wonder if the smaller ones are managed efficiently. A meta-frontier DEA model is calculated in order to benchmark, in terms of remuneration and quality, different clusters of distributors that present different technologies. The sample is composed of 236 distributors (including the five largest units). The savings for the system would be approximately 174 million Euros per year. Moreover, compensation regulation should aim to guide distributors towards their respective intra-cluster frontiers.