SERVICE QUALITY IN FRONTIER-BASED BENCHMARKING MODELS: A PROPOSAL FOR BRAZILIAN TRANSMISSION SERVICE OPERATORS BY LITERATURE REVIEW

This study investigates the incorporation of service quality into frontier-based benchmarking models, focusing on Brazilian Transmission Service Operators (TSOs). Service quality is a critical variable in the regulatory context, as it directly reflects operational efficiency and consumer impacts. However, benchmarking models adopted in the Brazilian electric transmission sector, particularly those proposed by ANEEL for the 2017-2022 tariff review cycle, still exhibit gaps in the effective inclusion of quality proxies. The research is grounded in a systematic literature review conducted across the Web of Science and SciELO databases, covering studies published between 2000 and 2023. Articles discussing the integration of quality into benchmarking models were analyzed, with emphasis on methodologies such as Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA). Data analysis included 32 Decision Making Units (DMUs) from Brazilian TSOs, covering the period from 2013 to 2016, based on ANEELs Technical Notes 160/2017 and 164/2017. Results indicate that service quality, when represented as a monetary variable, is most effective when incorporated as an input to adjust operational costs. The research highlights that ANEELs proposed model for the 2017 tariff review still lacks a consistent methodology for fully integrating service quality into benchmarking processes. The study concludes that adopting more robust proxies, such as the Parcel Variable (PV), could enhance the accuracy of efficiency assessments and ensure that TSOs meet appropriate performance standards, aligning with international best practices. This research contributes theoretically and practically to the ongoing debate on the optimal integration of service quality in regulated industries benchmarking models.