Productivity incentives in the electricity sector

July 19, 1999, the Netherlands Electricity Regulatory Service ('Dienst uitvoering en toezicht elektriciteitswet Dte) issued the consultation document 'Price-cap regulation in the electric power sector'. The document is strongly based on a modern, UK inspired method of regulation. The methods, as proposed in the document, will have an impact on the final electricity tariffs, and thus of great importance for the consumers and the businesses involved. In this article the most striking element in the consultation document is discussed: how to determine the X (i.e. the expected growth of the productivity) in the price-cap regulation