Textbook: Price Regulation and Tariffs
The purpose of this textbook is to equip students with the core concepts, objectives and
techniques of designing and evaluating rate structures in the energy sector. The text consists
of the following modules.
- Module 1 introduces financial analysis, one of the basic inputs of tariff development
and control. It also describes the method of determining the revenue requirement of
regulated energy companies.
- Module 2 after a short introduction of basic economic concepts, describes the basic
normative approaches and methods of tariff design.
- Module 3 contains a classification of observable consumption patterns and
corresponding consumer tariffs. The module also explains the rationale behind the
regulation of prices through which access to transmission grids can be obtained by the
participants of the competitive market.
- Module 4 compares the practical policies of rate-of-return and incentive regulation
under different industry conditions, and draws attention to the often conflicting
objectives involved in the process of designing a practical regulatory policy.
- Module 5 shows how the likely effects of different policy measures can be
investigated, and raises some important aspects to be considered when assessing social
impacts of energy policy decisions.
Regional Centre for Energy Policy Research (REKK)
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