The Brattle Group assists in the analysis, development, and implementation of systems of light-handed regulation designed to balance reliance on regulation against reliance on competitive forces to meet public policy goals. Our regulatory consulting work often focuses on creating incentives for efficient behavior.
For a U.S. gas distribution company, members of The Brattle Group designed a comprehensive incentive mechanism to replace traditional cost-of-service regulation. A price cap was designed for base rates, storage and transportation costs, and a market-index-based mechanism addressed the cost of gas supply. A quality of service component was developed to maintain service reliability.
For an independent power producer in Colombia, we analyzed regulatory proposals in their electric and gas markets. We identified which proposed design for capacity markets would better achieve the goals of providing adequate incentives for efficient capacity expansion. We recommended a strategy to make use of the bargaining strength that a fall-back regulated rate would give to the client’s power plant.
Our experience includes exposure to a large number of regulatory regimes in countries around the world. We have analyzed the regulation of natural gas pipelines in Australia, Brazil, Canada, Germany, Greece, Ireland, and Mexico. We have given advice on stranded cost recovery in the natural gas and electric power industries due to industry liberalization. We have also advised on the appropriate regulatory asset value and cost of capital to be applied in determining regulated access prices.