Duke Energy International (DEI) asked NERA to analyze international experience in power sector restructuring, with a focus on issues at the retail level, and to identify approaches adopted, and any trends or commonalities among them, in a sample of jurisdictions. England and Wales, Australia, New Zealand, and California and Maine in the United States were chosen as the jurisdictions as they all introduced retail competition as part of the restructuring of their electricity sector. The assignment was carried out principally by means of a survey that investigated various aspects of the restructuring efforts in the five jurisdictions.

The focus of the survey was to identify the effects on competition and economic efficiency of separating the distribution and commercialization segments and to explore whether or not the measures proposed resulted in uneconomic outcomes. NERA assessed what had been done internationally, the effect of the measures implemented on the efficiency of the underlying electricity markets, and their possible effects on the competitive segments of the electricity sectors. The analysis focused on four main issues that were determined by DEI to be of particular interest with respect to the efficient and competitive development of the Brazilian electricity sector. They are: 1) deverticalization or functional unbundling of the generation, transmission, distribution, and retail segments; 2) unbundling distribution tariffs into commercialization and wires components; 3) self- dealing; and 4) cross subsidies.