In this paper we advocate using the latent class model (LCM) approach to control for technological differences in traditional efficiency analysis of regulated electricity networks. Our proposal relies on the fact that latent class models are designed to cluster firms by uncovering differences in...

Abstract In 2002, the California Public Utilities Commission alleged that a group of energy sellers had overcharged California ratepayers by approximately $14 billion. The case went to trial and was dismissed, appealed, and ultimately remanded to the Federal Energy Regulatory Commission. It...