The deregulation of energy industries did not lead to an absence of regulation but rather to new forms of regulation. The objective of this seminar is to provide a better understanding of the issues surrounding energy regulation. The seminar begins by presenting the tools and trends in energy regulation. We will discuss the concept of natural monopolies, the rationale for government intervention and the specific role of regulatory agencies. More practically, we will look at various economic and financial approaches used in regulation today, and their effects: cost of service and rate base determination, optimal capital structure, the concepts of business risks, regulated versus non-regulated activities, transfer pricing and project authorization. Determination of fair return on equity using various methodologies will also be presented. Finally, we will address new trends in energy regulation, including performance-based and yardstick regulation. Time will also be devoted to practical examples and case studies about transmission and distribution.
- Law and regulation (legal aspects of regulation under restructured energy systems)
- Economic and Financial Principles of Regulation (Why and how to regulate under restructured energy systems)
- Economic Models of Regulation – Incentive mechanisms (Economic regulation in practice – evaluation tools of the impact of regulation on industry, consumers, government and other stakeholders, presentation of case studies and practical international examples demonstrating the real effects of reforms ),
- Financial Models of Regulation (Use of Models to determine the « just rate of return » and the links between cost of capital and electricity prices, functioning of the wholesale markets and pricing mechanisms, competition issues in restructured markets).