Quality efficiency of Electricity Distribution Companies in New Zealand

Controlling and improving the quality standard of products is a must-do strategy for all companies in competitive market. By applying DEA method to analyze technical efficiency in Efficiency model and Quality efficiency model for 29 electricity distribution businesses (EDBs) in New Zealand, the author is giving a benchmark for those companies to improve their performance. The paper also points out the problems in efficiency and quality management for each EDBs.

Data

The data used for this empirical data analysis were collected and published by Commerce Commission Department of New Zealand under the requirement for information disclosure under Part 4 of the Commerce Act for Electricity Distribution Businesses (EDBs). All required data collected from all 29 EDBs in New Zealand for the period ended 31 March 2008, 2009, 2010, 2011 and 2012.

Model

Data Envelopment Analysis (DEA)

Model 1: Efficiency model – Input-oriented model

• ❖ Output: Number of connection points (nofcp)
• ❖ Output: Electricity volumes carries (ES)
• ➢ Input: Total circuit length (for supply) Overhead (CLO)
• ➢ Input: Total circuit length (for supply) Underground (CLU) ➢ Input: Total distribution transformer capacity (DTC)

Model 2: Quality efficiency model – Input-oriented model

• ❖ Output: Number of connection points (nofcp)
• ❖ Output: Electricity volumes carries (ES)
• ➢ Input: Total circuit length (for supply) Overhead (CLO)
• ➢ Input: Total circuit length (for supply) Underground (CLU) ➢ Input: Total distribution transformer capacity (DTC)
• ➢ Input: System average interruption duration index (SAIDI)