The Regulation of Investment in Utilities: Concepts and Applications

This paper reviews the common approaches adopted by regulators to the inclusion and valuation of investment in the regulatory asset base and the allocation of costs of investment between different users as well as between connection and usage charges. The former set of issues are key to the creation of incentives for companies to undertake efficient least-cost investment while the latter address the key concern of how revenues are recovered (and the associated risks for the operator). By understanding these issues and how they relate to the investments that are needed in a sector, regulators have an opportunity to design regimes better able to promote necessary investment. Drawing on a worldwide series of case studies from across the regulated sectors the paper illustrates the various approaches to regulating investment and some of the practical implementation problems that are faced. This allows some tentative suggestions for the design of practical investment regimes to be developed.

Bibliographic Details

Main Authors:	Alexander, Ian, Harris, Clive
Language:	English en_US
Published:	Washington, DC: World Bank 2005
Subjects:	ACCELERATED DEPRECIATION, ACCOUNTING, AFFILIATED ORGANIZATIONS, AIRPORT PRICING, ASSETS, BENCHMARK, BENCHMARKING, BENCHMARKS, CAPITAL EXPENDITURE, CAPITAL INVESTMENTS, COMPLIANCE COSTS, CONSUMERS, COST OF CAPITAL, DEBT, DEMAND MANAGEMENT, DISTRIBUTED GENERATION, ECONOMIC REGULATION, ECONOMICS, ECONOMIES OF SCALE, ECONOMISTS, EFFICIENCY SAVINGS, ELECTRICITY DISTRIBUTION, ELECTRICITY TRANSMISSION, ENERGY MARKETS, ENVIRONMENTAL, ENVIRONMENTAL IMPACTS, ENVIRONMENTAL REQUIREMENTS, ENVIRONMENTAL TARGETS, FINANCIAL MARKETS, FIXED COSTS, GAS, GAS DISTRIBUTION, GAS REGULATOR, GENERATING CAPACITY, GENERATION CAPACITY, INCOME, INEFFICIENCY, INFRASTRUCTURE INDUSTRIES, INFRASTRUCTURE SECTORS, INVESTMENT DECISIONS, INVESTMENT NEEDS, INVESTMENT PROGRAMS, INVESTMENT REGULATION, LEGAL STATUS, LOGGING, MAINTENANCE COSTS, NATURAL MONOPOLIES, NPV, OPERATING COSTS, OPPORTUNITY COST, OPTION VALUE, PORTFOLIO, POWER TRANSMISSION, PRICE CAP, PRICE CAP REGULATION, PRICE CAPS, PRICE CONTROL PERIOD, PRICE CONTROLS, PRICE LEVELS, PRIVATE CAPITAL, PRIVATE CAPITAL FLOWS, PRIVATE SECTOR, PRIVATIZATION, PUBLIC UTILITIES, QUALITY MEASURES, QUALITY STANDARDS, RATE OF RETURN, RATES OF RETURN, REGIONAL TRANSMISSION, REGULATED UTILITIES, REGULATED UTILITY, REGULATION OF INVESTMENT, REGULATORS, REGULATORY AGENCIES, REGULATORY APPROACHES, REGULATORY FRAMEWORK, REGULATORY PROCESS, REGULATORY REGIMES, REGULATORY SYSTEM, REGULATORY SYSTEMS, REGULATORY TREATMENT, REVENUE CAPS, SANITATION, SAVINGS, SERVICE PROVIDERS, SERVICE QUALITY, TRANSMISSION COMPANY, TRANSMISSION GRID, TRANSMISSION PRICING, UNIT COST, UTILITIES, VALUATION, VARIABLE COSTS, WATER DISTRIBUTION,
Online Access:	http://documents.worldbank.org/curated/en/2005/01/6426903/regulation-investment-utilities-concepts-applications https://hdl.handle.net/10986/7293
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