Ex post regulation as the method of sectoral regulation in electricity sector

Aim/purpose – The aim of the article is to present the essence of ex post approach to sectoral regulation, to show the advantages and disadvantages of ex post regulation and to answer the question whether it is worth using in the electricity sector.

Design/methodology/approach – For this purpose, a critical analysis of expert literature was made and an empirical analysis of countries that have applied ex post regulation in the electricity sector in the European Union. Two research methods were used: a case study and a comparison of changes in price and quality of services. The research period covered the period 2000-2016.

Findings – It was found that ex post regulation reduces regulatory costs, does not adversely affect the quality of service and long-term rates, gives businesses the freedom of decision-making and the ability to react quickly to changes in the economy. The main disadvantages of ex post regulation are the tendency for companies to over-estimate bills for consumers, the difficulty of pursuing claims by consumers and the need to shift regulatory risk to consumers.

Research implications/limitations – In the paper there was identified a research gap, i.e. the effects of ex post regulation in the electricity sector in European Union countries where such regulation was applied. Identifying the research gap will help us understand what are the advantages and disadvantages of ex post regulation and will create a model for when it is good moment to implement this in the economy. Besides identifying the research gap, further studies will be required over ex post regulation.

Originality/value/contribution – The additional value of the paper is the study of ex post regulation, its essence and types. The article analyzed the effects of ex post regulation in the electricity sector and provided valuable insights into the potential risks associated with this approach to economic regulation.