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 charg...
| Main Authors: | , |
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| Format: | Publication |
| Language: | English en_US |
| Published: |
Washington, DC: World Bank
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2005/01/6426903/regulation-investment-utilities-concepts-applications http://hdl.handle.net/10986/7293 |
| Summary: | 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. |
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