Volume 4: Innovative Solutions for Energy Transitions: Part III

Critical Analysis of the Econometric Models Used in the Regulatory Framework of Non-Technical Losses in Brazil Electric Sector Marcelo Maestrini, Murilo Miranda, Daniel Viana, Arthur Tavares, Ana Carolina Chaves, Luiz Ozório, Guilherme Dantas, Priscila Mendes, Jairo Eduardo

Abstract

The non-technical losses in Electric Sector are all the wastes of energy that occurs in the electricity distribution grid because of commercials and manageable aspects. For example, this losses are higher associated with electric theft. To incentive the concessionaires to have a good performance in combat these losses, there is a regulatory treatment that imposes some targets for this issue. In Brazil, the regulatory framework adopt a benchmark model to determine the target. In this model, the regulator uses a regulator econometric approach with socioeconomic data to subsidize the comparison between companies based on the complexity of each concession area. This article execute a critical econometric analysis of this methodology. For this, the article discuss the effectiveness of the model based on econometric test of estimations and residuals. Moreover, there is a specific analysis for the specification of variables and for the autocorrelations in the model. In the end, the paper demonstrate the weaknesses of the model to represent the reality of fighting against losses in the sector. As a result, there are contests about the choice of this type of model and the biases of omitted variables.

Keywords Econometric Analysis, Regulation of Electricity Non-technical Losses, Socioeconomic Model, Panel Data with Random Effects.