Evidence has repeatedly shown that at the introduction stage of incentive regulation investment may be hampered by strong incentives to save costs. Consequently, investment or quality regulation is necessary to guarantee socially efficient investment. Quality regulation can bear implicit discrimination potential towards network operators when certain heterogeneous characteristics do occur. Two such relevant characteristics are the size (e.g. km cable length, n° of circuit breakers, n° of transformers, etc.) and the age distribution of an electricity network. Whereas the size of a network is observable with few effort, the latter can lead to hidden characteristic problems, because accounting often solely considers aggregated values, fails to distinguish between capital and operating-based expenditure for replacement or simply did not record actions in the past properly. Resulting structural disadvantages may, firstly, exist due to worse expected quality indices (elder networks suffer from a higher number of component failures and thus outages). Secondly, greater variation coefficients of these expected quality indices may lead to a disadvantageous (higher) risk exposure, because smaller and elder networks suffer higher stochastic influences in their overall failure behavior. Both effects will require higher capital costs for a risk-averse investor/manager which in turn leads to discrimination. Short-term adjustment of the two characteristics is quite difficult: The adjustment of network size leads to the search for an efficient scale of production, which can only be influenced over years. The modification of the age distribution of assets depends on several bottlenecks such as financial liquidity, infrastructural restrictions (e.g. planning and building permissions), or workforce capacity restrictions leading to similar complications. It is up to the regulator to decide whether to consider initial disadvantages (that namely companies are not responsible for) as stranded costs or to punish companies with structural disadvantages. The risk of not considering stranded costs incurs increased transaction costs due to potential bankruptcies. The aim of this article is to analytically demonstrate and further quantify potential discrimination by quality penalization resulting from increased incurred risk due to differences in size, different ratios of reinvestment to quality related cost, and different aging characteristics of the network as different average age and different, heterogeneous age structures.