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.
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