also remain, therefore, on Greenwald, B (1984), ‘Rate regulatory policy and practice Base Selection and the that protect this benefit. Structure of Regulation’, RAND Journal of Economics, More generally, a ‘no-regrets’ 15(1), Spring, pp. 85-95. approach would be to use exactly the same types of Kolbe, A and Tye, W (1996), tools used in the competitive for the Risk of ‘Compensation market to manage risks. This Stranded Assets’, Energy includes exploring flexibility of Policy, 24(12), pp. depreciation approaches, which respond to market Lyon, T and Mayo J (2005), circumstances and evolving Opportunism and ‘Regulatory risks. A priority should also Investment Behavior: be pricing that promotes Evidence from the U.S. efficient usage and Electric Utility Industry’, consumption signals. RAND Journal of Economics, Collectively, these tools and 36(3), pp. 628-644. approaches provide far Vogelsang, Ingo (2014), in the Face of ‘Regulating greater scope for much better Declining Demand’, Presentation to the Fifteenth ACCC/AER Regulatory Conference, August. outcomes for consumers relying on regulated infrastructure services, than do calls for regulatory References
also remain, therefore, on regulatory policy and practice that protect this benefit. More generally, a ‘no-regrets’ approach would be to use exactly the same types of tools used in the competitive market to manage risks. This includes exploring flexibility of depreciation approaches, which respond to market circumstances and evolving risks. A priority should also be pricing that promotes efficient usage and consumption signals. Collectively, these tools and approaches provide far greater scope for much better outcomes for consumers relying on regulated infrastructure services, than do calls for regulatory References Greenwald, B (1984), ‘Rate Base Selection and the Structure of Regulation’, RAND Journal of Economics, 15(1), Spring, pp. 85-95. Kolbe, A and Tye, W (1996), ‘Compensation for the Risk of Stranded Assets’, Energy Policy, 24(12), pp. Lyon, T and Mayo J (2005), ‘Regulatory Opportunism and Investment Behavior: Evidence from the U.S. Electric Utility Industry’, RAND Journal of Economics, 36(3), pp. 628-644. Vogelsang, Ingo (2014), ‘Regulating in the Face of Declining Demand’, Presentation to the Fifteenth ACCC/AER Regulatory Conference, August.