Lantz, Björn2006-12-142007-02-092007-02-0920031403-3704http://hdl.handle.net/2077/2628The Swedish Energy Agency is currently developing a performance assessment model for grid companies. The model relates total revenue to a standard cost based on a fictitious grid. This paper discusses a major theoretical disadvantage of this regulation principle, i.e. that the short and long term perspective is mixed. The result may be that a regulated actor compensates short term inefficiency with long term inefficiency. By measuring short and long term efficiency separately, this paper shows how this disadvantage easily can be eliminated.22 pages279407 bytesapplication/pdfsv-SEElectricity distribution; regulation theory; efficiencyReportBusiness studies