ECA SERVICES / REGULATORY ECONOMICS
ECA has extensive regulatory experience in the utility and infrastructure sectors. We develop revenue setting methodologies for regulated monopoly businesses and associated regulatory procedures based on best regulatory practice and relevant regulatory objectives.
We also provide support to regulators and other market participants (utility businesses, consumer representatives) in advancing positions during a price or revenue control review.
In the area of markets, our work includes providing advice and support to governments and regulators on utility market restructuring including conceptual design, impact analysis, drafting rules, undertaking operational assessments, developing network access conditions and advising on optimal strategies for participants.
SELECTED PROJECTS INCLUDE >
SELECTED PROJECTS INCLUDE >
We reviewed third party access models internationally, drafted a third party access code (based on the recommended model), developed accompanying pricing models, drafted a grid code and provided capacity building and training.
Myanmar recently enacted a new Electricity Law, setting out a legal basis for the future expansion of the industry to meet Myanmar’s commitments to expand electricity access and meet rapidly growing demand. The ADB supported the preparation of a number of regulations implementing the law and ECA was responsible for drafting the Electricity Tariff Regulations which govern all on-grid tariffs.
ECA advised the Government of Egypt on a suitable regulatory framework to reduce associated petroleum gas (APG) flaring and venting levels at upstream production sites. We identified the major barriers to APG reduction investments in Egypt and identified international lessons from jurisdictions which have successfully reduced gas flaring in the past. We were able to select the most suited regulatory reforms to meet the policy objectives set by the Government.
ECA modelled the Dutch, Belgian and GB gas markets to assess the extent to which the gas interconnectors, IUK and BBL will be able to exercise market power when their current long-term contracts come to an end in 2018 and 2022 respectively.
ECA provided a member of staff to work with MZEC to provide support to their regulatory team in preparation for the next regulatory price control.
ECA led the team which reviewed the current position, examined comparable frameworks in other countries, prepared a business plan and financing strategy, and drafted the required legal frameworks for establishment. ECA led a high level regulatory study tour to Zambia and Kenya.
ECA assisted in the electricity regulator broadening its mandate to become the Lesotho Electricity and Water Authority (LEWA). In follow-up projects, we have assisted LEWA in the implementation of economic and financial regulatory models.
ECA worked with NWASCO to develop a strategy for regulating sanitation services in Zambia. The work also included a series of capacity building activities for NWASCO staff to enhance the economic, technical and policy skills required for implementing policies and managing sustainable regulatory systems.
This project helped the Natural Gas Authority to regulate and develop the transmission and distribution of natural gas in Israel.
ECA provided advisory services to the Electricity Regulatory Agency of Vietnam (ERAV) on the implementation of power market reforms in accordance with the Government’s roadmap for the sector.
Jemena Networks needed assistance modelling its regulatory asset base based on new reporting requirements set by the Australian Energy Regulatory. ECA developed a new model that allocated the existing regulatory asset based among new benchmarking asset categories, using estimates of depreciated replacement cost.
ECA was contracted to advise the Consumer Council for Water on the appropriate cost of capital for the water companies in the 5-year regulatory period of Ofwat’s PR14 price review. ECA’s analysis focused on the weighted average cost of capital (WACC) and the recent financial performance of the companies.
The Regulatory Authority for Energy (RAE) appointed ECA to provide support regarding an interim methodology for setting the allowed revenues for electricity transmission, in preparation for the privatisation of the transmission system operator (TSO) in Greece.