Designing Natural Gas Distribution Concessions in a Megacity: Tradeoffs between Scale Economies and Information Disclosure in Mexico City
In 1995 the Mexican government initiated structural reform of the natural gas sector-reform that permitted private investment in transportation, storage, distribution, trade and marketing while maintaining a State monopoly in production. It prepare...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/01/5296540/designing-natural-gas-distribution-concessions-megacity-tradeoffs-beetween-scale-economies-information-disclosure-mexico-city http://hdl.handle.net/10986/14208 |
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okr-10986-142082021-04-23T14:03:21Z Designing Natural Gas Distribution Concessions in a Megacity: Tradeoffs between Scale Economies and Information Disclosure in Mexico City Rosellon, Juan Halpern, Jonathan ACCESS TO MARKETS AVERAGE CONSUMPTION AVERAGE COSTS BENCHMARK BENCHMARKING BENCHMARKS BIDDING CAPITAL COSTS COMPARATIVE ANALYSIS CONSUMERS CONSUMPTION LEVELS COST ANALYSIS COST FUNCTIONS COST MINIMIZATION DEBT DEMAND FUNCTIONS DEMAND GROWTH DEMOGRAPHICS DISTRIBUTION SYSTEMS ECOLOGY ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIES OF SCALE ENERGY PRICES ENVIRONMENTAL POLICIES EQUILIBRIUM EXPLOSIONS FORECASTS FORESTS FUELS FUNCTIONAL FORMS GROWTH POTENTIAL GROWTH RATE HEATING IMPORTS INCOME INFORMATION DISCLOSURE INPUT PRICES LAND USE LOCAL AUTHORITIES LOW TARIFFS MARKET CONDITIONS MARKET DEMAND MARKET POWER MARKETING MONOPOLIES NATURAL MONOPOLY OIL OIL CONSUMPTION OIL PRICES PERMITS PETROLEUM PHYSICAL CHARACTERISTICS POPULATION DENSITY POWER PLANTS PRICE CAPS PRICE REGULATION PRIVATE INFORMATION PURCHASING PURCHASING POWER REGULATORY FRAMEWORK RESIDENTIAL CONSUMERS RIVERS SAFETY SALES SOCIAL DEVELOPMENT SUBSTITUTES SUBSTITUTION SUNK COSTS SUPPLY CONTRACTS TOTAL REVENUE TRADEOFFS UNCERTAINTY USERS In 1995 the Mexican government initiated structural reform of the natural gas sector-reform that permitted private investment in transportation, storage, distribution, trade and marketing while maintaining a State monopoly in production. It prepared a detailed regulatory framework to implement the sector liberalization, including an element to develop distribution systems through concessions in specific geographic areas. The concessions are bid and the winner is permitted physical exclusivity for 12 years in gas distribution but not in gas marketing. In each concession award process a distribution geographical area is defined and minimum consumer coverage targets are established. Bidders present technical and financial proposals, including a market demand study. The winning proposal must be technically sound and offer the lowest average revenue for the first five-year period. Densely populated geographic areas pose a problem for exclusivity in distribution. If the concession is granted to a single firm, scale economies might be very attractive, but regulating a mega-monopoly would be difficult. If the distribution area is subdivided, economies of scale decrease while information for comparative regulation increases. These and such elements as technical characteristics of the geographic area and potential for competition in related services were considered when designing natural gas distribution franchises for the Mexico City Metropolitan Area. 2013-06-26T17:13:29Z 2013-06-26T17:13:29Z 2004-01-01 http://documents.worldbank.org/curated/en/2004/01/5296540/designing-natural-gas-distribution-concessions-megacity-tradeoffs-beetween-scale-economies-information-disclosure-mexico-city http://hdl.handle.net/10986/14208 English en_US Policy Research Working Paper;No.2538 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Mexico |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCESS TO MARKETS AVERAGE CONSUMPTION AVERAGE COSTS BENCHMARK BENCHMARKING BENCHMARKS BIDDING CAPITAL COSTS COMPARATIVE ANALYSIS CONSUMERS CONSUMPTION LEVELS COST ANALYSIS COST FUNCTIONS COST MINIMIZATION DEBT DEMAND FUNCTIONS DEMAND GROWTH DEMOGRAPHICS DISTRIBUTION SYSTEMS ECOLOGY ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIES OF SCALE ENERGY PRICES ENVIRONMENTAL POLICIES EQUILIBRIUM EXPLOSIONS FORECASTS FORESTS FUELS FUNCTIONAL FORMS GROWTH POTENTIAL GROWTH RATE HEATING IMPORTS INCOME INFORMATION DISCLOSURE INPUT PRICES LAND USE LOCAL AUTHORITIES LOW TARIFFS MARKET CONDITIONS MARKET DEMAND MARKET POWER MARKETING MONOPOLIES NATURAL MONOPOLY OIL OIL CONSUMPTION OIL PRICES PERMITS PETROLEUM PHYSICAL CHARACTERISTICS POPULATION DENSITY POWER PLANTS PRICE CAPS PRICE REGULATION PRIVATE INFORMATION PURCHASING PURCHASING POWER REGULATORY FRAMEWORK RESIDENTIAL CONSUMERS RIVERS SAFETY SALES SOCIAL DEVELOPMENT SUBSTITUTES SUBSTITUTION SUNK COSTS SUPPLY CONTRACTS TOTAL REVENUE TRADEOFFS UNCERTAINTY USERS |
| spellingShingle |
ACCESS TO MARKETS AVERAGE CONSUMPTION AVERAGE COSTS BENCHMARK BENCHMARKING BENCHMARKS BIDDING CAPITAL COSTS COMPARATIVE ANALYSIS CONSUMERS CONSUMPTION LEVELS COST ANALYSIS COST FUNCTIONS COST MINIMIZATION DEBT DEMAND FUNCTIONS DEMAND GROWTH DEMOGRAPHICS DISTRIBUTION SYSTEMS ECOLOGY ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIES OF SCALE ENERGY PRICES ENVIRONMENTAL POLICIES EQUILIBRIUM EXPLOSIONS FORECASTS FORESTS FUELS FUNCTIONAL FORMS GROWTH POTENTIAL GROWTH RATE HEATING IMPORTS INCOME INFORMATION DISCLOSURE INPUT PRICES LAND USE LOCAL AUTHORITIES LOW TARIFFS MARKET CONDITIONS MARKET DEMAND MARKET POWER MARKETING MONOPOLIES NATURAL MONOPOLY OIL OIL CONSUMPTION OIL PRICES PERMITS PETROLEUM PHYSICAL CHARACTERISTICS POPULATION DENSITY POWER PLANTS PRICE CAPS PRICE REGULATION PRIVATE INFORMATION PURCHASING PURCHASING POWER REGULATORY FRAMEWORK RESIDENTIAL CONSUMERS RIVERS SAFETY SALES SOCIAL DEVELOPMENT SUBSTITUTES SUBSTITUTION SUNK COSTS SUPPLY CONTRACTS TOTAL REVENUE TRADEOFFS UNCERTAINTY USERS Rosellon, Juan Halpern, Jonathan Designing Natural Gas Distribution Concessions in a Megacity: Tradeoffs between Scale Economies and Information Disclosure in Mexico City |
| geographic_facet |
Latin America & Caribbean Mexico |
| relation |
Policy Research Working Paper;No.2538 |
| description |
In 1995 the Mexican government initiated
structural reform of the natural gas sector-reform that
permitted private investment in transportation, storage,
distribution, trade and marketing while maintaining a State
monopoly in production. It prepared a detailed regulatory
framework to implement the sector liberalization, including
an element to develop distribution systems through
concessions in specific geographic areas. The concessions
are bid and the winner is permitted physical exclusivity for
12 years in gas distribution but not in gas marketing. In
each concession award process a distribution geographical
area is defined and minimum consumer coverage targets are
established. Bidders present technical and financial
proposals, including a market demand study. The winning
proposal must be technically sound and offer the lowest
average revenue for the first five-year period. Densely
populated geographic areas pose a problem for exclusivity in
distribution. If the concession is granted to a single firm,
scale economies might be very attractive, but regulating a
mega-monopoly would be difficult. If the distribution area
is subdivided, economies of scale decrease while information
for comparative regulation increases. These and such
elements as technical characteristics of the geographic area
and potential for competition in related services were
considered when designing natural gas distribution
franchises for the Mexico City Metropolitan Area. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Rosellon, Juan Halpern, Jonathan |
| author_facet |
Rosellon, Juan Halpern, Jonathan |
| author_sort |
Rosellon, Juan |
| title |
Designing Natural Gas Distribution Concessions in a Megacity: Tradeoffs between Scale Economies and Information Disclosure in Mexico City |
| title_short |
Designing Natural Gas Distribution Concessions in a Megacity: Tradeoffs between Scale Economies and Information Disclosure in Mexico City |
| title_full |
Designing Natural Gas Distribution Concessions in a Megacity: Tradeoffs between Scale Economies and Information Disclosure in Mexico City |
| title_fullStr |
Designing Natural Gas Distribution Concessions in a Megacity: Tradeoffs between Scale Economies and Information Disclosure in Mexico City |
| title_full_unstemmed |
Designing Natural Gas Distribution Concessions in a Megacity: Tradeoffs between Scale Economies and Information Disclosure in Mexico City |
| title_sort |
designing natural gas distribution concessions in a megacity: tradeoffs between scale economies and information disclosure in mexico city |
| publisher |
World Bank, Washington, D.C. |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/01/5296540/designing-natural-gas-distribution-concessions-megacity-tradeoffs-beetween-scale-economies-information-disclosure-mexico-city http://hdl.handle.net/10986/14208 |
| _version_ |
1764430736145776640 |