RELATION COST VERSUS QUALITY OF SERVICES PROVIDED BY ELECTRICITY DISTRIBUTORS IN BRAZIL

Abstract

This study aims to examine the relationship between costs and the quality of services provided by electricity distributors listed in Brazilian Stock Exchange. The sample consists of 21 companies with data referring to the period 2015-2019. The cost was measured based on the amount recognized by the companies as cost of the service provided each year in the Income Statement. As measures for the quality of services provided, the following were adopted: (i) ANEEL Consumer Satisfaction Index (IASC) – external quality measure; and (ii) Equivalent Interruption Duration per Consumer Unit (DEC) and Equivalent Interruption Frequency per Consumer Unit (FEC) – internal quality measures. As control measures, age, Research & Development expenses, profitability, corporate governance and control were tested. Estimates were made with linear regressions in balanced panel and quantile regression. The results show that the cost of these services absorbs, on average, more than 80% of revenue. The cost recognized in the period is positively related to the quality of the services offered. Evidence shows that higher cost values explain increases in IASC and reductions in DEC and FEC, signaling the favorable effect of cost on quality in this sector. Control measures also explain quality variations. It is concluded that the cost can play an important strategic variable role in the provision of services within the electric energy sector in Brazil.