expertise \ utility regulation
Helping rate regulation provide the right signals
so that profit and sustainability go hand in hand
Despite the important trend toward competition in energy markets, most electric and natural gas functions are still natural monopolies and remain fully regulated. Regulatory regimes - which aim to compensate for the absence of competition as a means to achieving society's least-cost solutions - therefore remain at the heart of the energy sector.
Yet traditional cost of service ratemaking can hinder efforts to minimize capital and operating costs, improve end-use energy efficiency and otherwise ensure delivery of service at the lowest societal cost. In fact, many regulatory regimes still discourage utilities, inadvertently, from acting as cost-efficient and responsible corporate citizens.
The Helios Centre helps put an end to these unfortunate and unnecessary regulatory signals. By working through the myriad details of economic regulatory practice and proposals, we help to identify potential barriers to both economic and environmental efficiency. We do so by examining not only the broad approach to rate regulation - be it cost of service, price cap, revenue cap or others -, but by further delving into the fine print of those approaches, answering such questions as:
The Helios Centre has written extensively on these topics. From providing expert testimony at regulatory hearings to assisting stakeholders in multi-party negotiations to helping governments understand and sort out the full breadth of possible approaches and their varied costs and benefits, the Centre has developed a solid reputation for its emphasis on rigourous review of utility proposals and on the design and analysis of preferred regulatory solutions.
Independent regulation of monopoly utility functions is essential to ensuring and protecting the public interest. Price regulation - due to the powerful incentives it creates - must be practiced carefully and thoughtfully, with an eye not only to allowing reasonable returns but also to the ways in which those returns can - and cannot - be earned. The Helios Centre is proud to contribute to the development of a portfolio of incentives and regulatory methods that align the equally legitimate goals of economic efficiency, equity and environmental sustainability.
For an example of the type of work we do in this field, please go to Accomplishments / Sample Projects on the menu to the left. To download our publications, please choose Publications.