This paper takes the regulatory impact evaluation of the incentive mechanism to improve the technical quality of electricity distributors in Brazil. The methodology proposed by the Brazilian regulatory agency (ANEEL) follows the concept of the mechanism RPI – X know by subtracting the productivity gains in the annual tariff adjustments. Inside the X factor the regulator has created a mechanism that increases the tariff recognition of companies that can improve the quality of service. However, this mechanism does not have an empirical model that corroborates the estimated results and set in a discretionary manner the limits of incentive structure. In this paper we have created an empirical model that confronts the estimated elasticity percentage to increase (or decrease) recognition of costs following a panel fixed effects model. In this statistical model it is possible confront the magnitude of the trade-off in the structure of regulatory incentives linked to the amount of reconnaissance of operation and capital costs. The results indicate that in some underlying criteria the tariff recognition is insufficient to offset the increased costs that ensure the improvement of technical quality in both perspectives: punishment and incentive recognition for operate with better practices, especially in some immature concession areas.