LUISS – ENERGY ECONOMICS 2024/2025
LECTURE 12:
REGULATION OF THE UTILITIES
Prof. Carlo Andrea Bollino
University of Perugia
University Luiss Guido Carli, Rome
REGULATION
Traditional regulation:
- Rate level
- Rate structure
2
REGULATION
Traditional regulation – rate level
Expenses
3
REGULATION
Traditional regulation – rate level
Rate base
4
REGULATION
Traditional regulation – rate level
Rate of return = “income allowed per unit of investment”
5
REGULATION
Traditional regulation – rate structure
Rate structure = “tariff efficient and fair”
6
REGULATION
Traditional regulation – rate structure
Rate structure = “tariff efficient and fair”
7
REGULATION
Traditional regulation – rate structure
cost allocation:
cost functionalization
cost classification
cost allocation to customers
8
REGULATION
Traditional regulation – rate structure
cost allocation:
cost functionalization
cost classification
cost allocation to customers
9
REGULATION
Traditional regulation – rate structure
cost allocation:
cost functionalization
cost classification
cost allocation to customers
10
REGULATION
Traditional regulation – rate structure
cost allocation:
cost functionalization
cost classification
cost allocation to customers
11
REGULATION
New regulation – price cap
12
REGULATION
New regulation – price cap
13
0