“A Cost of Capital and Capital Markets Primer for Utility Regulators” is a guide to helping utility regulators around the world understand the capital markets and estimate the cost of capital, which is one of the elements of effective cost-based ratemaking and developing cost-reflective tariffs.

Developed by NARUC and authored by John D. Quackenbush, CFA, President of JQ Resources, LLC and former Michigan PSC Chairman, the primer describes capital markets and a set of pathways that regulators in countries with emerging economies may want to consider when estimating the cost of capital for use to determine the utility revenue requirement in ratemaking.

This Primer was developed in partnership with the National Association of Regulatory Utility Commissioners (NARUC) and with the generous support of the United States Agency for International Development (USAID). This Primer is one in the series of various primers on cost-reflective tariffs and will be incorporated into a larger comprehensive guide on tariff settings, the Tariff Toolkit.