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Regulation & Incentives for Utility Investments in Grid Modernisation …
Regulation & Incentives for Utility Investments in Grid Modernisation
Financial analyst
Capital
Easy access
Low cost
Incentives
Most value for current
shareholders
Mechanism
Differentiated return
De-risking
rate-base treatment for expenses
Formula rates auto adjust
Sharing mechanism
Performance-based incentives
Price caps
V = (𝒓 − 𝒌)I
V = incremental annual economic
shareholder value added
I = amount capital invested
r = return on equity
k = cost of equity
Issue
Choice
Risk
Return
Scale
Institutional Framework
Expert
Rate-of-return model
Incentives
cost control :check:
innovation :check:
cost efficiency :check:
Tools
Regulatory lag
prudence review
incentive returns
Need effective
implementation
Promote economic
efficiency
system
ratepayer
societal
Clean energy consultant
Review needed
Capital investment :check:
expense-based solution :red_cross:
third party solution :red_cross:
What do we want?
How do we pay for that?