Performance evaluation of electric distribution utilities based on data envelopment analysis

In this paper, a method for benchmarking performance of electric distribution utilities based on data envelopment analysis (DEA) is presented. Basic theory of DEA is followed by case studies addressing performance analysis of the 50 largest (based on megawatt-hour sales) electric distribution utilities in the U.S. The results include performance efficiency, gaps in inputs and outputs of inefficient utilities, sensitivity-based classification of utilities, and a gap report. Also, peer-to-peer comparison of inefficient with efficient utilities is provided. Based on these results, inefficient utilities can develop strategic plans to improve performance.