The objective of this research is to determine the technical efficiency gains of electricity distribution companies in Peru since the establishment of the regime established by Law 25844 on Electricity Concessions in November 1992, using stochastic frontier analysis (SFA).

After establishing the need for regulation on natural monopolies, the author describes some aspects of the electricity distribution sector and criticizes the limitations of the current model used by regulators to measure their performance, and concludes by proposing an alternative approach.