How we can help…
Regulators and rule makers
Our engineering, technical and regulatory experience means we can help regulators and rule makers with a range of tasks, including:
assessing a network businesses regulatory proposals and submissions
economic regulatory design and application advice
strategic industry reviews and regulatory-technical advice
compliance and non-compliance reviews of service standards
Typically, we are engaged as an independent advisor to a regulator or rule maker, providing an independent report, which forms an input to their deliberations. But we can be engaged to work directly within the regulator’s or rule maker’s team, providing resources for the analysis and advice supporting their decisions.
Assessing regulatory proposals and submissions
We have significant experience both assessing network businesses’ regulatory proposals on behalf of regulators and assisting network businesses prepare regulatory proposals. We typically focus on the expenditure elements of revenue proposals (ie historical and forecast capital and operating expenditure) and other technical components of these proposal (eg service standards and targets).
Importantly, our experience working with network businesses and regulators on these matters provides us with a detailed understanding of how businesses typically develop a proposal, and therefore, how to assess proposals and interact with network businesses.
Consequently, we can provide a range of services to assist regulators make robust assessments of proposals, including:
strategic project design, planning and management
initial identification of proposal issues (ie for further consultation and investigation)
reviewing expenditure forecasting methodologies
reviewing asset management and governance frameworks and practices
benchmarking and top-down analysis of expenditure and other technical parameters
undertaking detailed reviews of project and program justifications
preparing information requests and interacting with network businesses and other stakeholders
performing independent forecasting and analysis
preparing independent expert reports, suitable for publication.
Economic regulatory design and application advice
Economic regulatory rules and the associated regulatory assessment methods and techniques are often being reviewed and improved. Our extensive work both assessing regulatory proposals and preparing proposals means that we are well placed to advise regulators and rule makers on the rules, processes, methods, techniques, and information needs necessary to specify and assess expenditure components and other technical matters within a regulatory building block proposal.
The types of service we may provide, include:
conceptual advice on the rules, process, methods and techniques to assess a regulatory proposal and incentivise efficient costs
advice and assistance with designing and specifying the information requirements to undertake an assessment of a regulatory proposal, including business documents, special purpose regulatory documents, and business data templates
the development and provision of regulatory assessment models and frameworks
conducting industry surveys and research e.g. national and internal surveys and literature searches
reviewing and critiquing a network business (or other stakeholder) analysis, reasoning and position
assistance in preparing internal documents or submissions to external parties e.g. issues papers, discussion papers, etc
assistance in interacting with other stakeholders, including reviewing or responding to their submission or views
providing independent expert reports.
Strategic industry reviews and regulatory advice
Regulatory rules, regulatory assessment techniques and other obligations and requirements on network businesses are often being reviewed and changed. In addition, the industry is currently undergoing a significant change due to new technologies, including forms of distributed generation and storage and “smart grid” facilities, which are all changing how networks are operated, planned and managed now and in the future.
We have broad knowledge and experience with many factors relevant to these changes, including:
industry and market arrangements
economic and technical rules and regulations
range of regulator design and assessment techniques
the business systems, asset management practices and expenditure and performance drivers of network businesses
embedded and distributed generation, storage and the smart grid and methods to analyses and assess their effect on the industry.
This means that we are well placed to advise regulators and rule makers on the implications of possible changes. We typically assist regulators and rule makers by analysing and evaluating the implication of a possible change on a business’ expenditure, customer service levels, network performance and risks.
The types of service we may provide, include:
conceptual and design advice on the specification of technical aspects of rules, regulations and standards
advice and assistance with designing and specifying the information requirements to network businesses to evaluate changes
advice on methodologies to evaluate changes, particularly with regard to predicting the effects of a change on network expenditure, customer service levels, and industry risks
the development of evaluation models and frameworks
conducting industry surveys and research eg national and internal surveys and literature searches
reviewing and critiquing a network business’ (or other stakeholder’s) analysis, reasoning and position on possible changes
assistance in preparing internal documents or submissions to external parties eg issues papers, discussion papers, etc
assistance in interacting with other stakeholders, including attendance at meetings and reviewing or responding to their submission or views
providing independent expert reports.
Note on the AER’s repex and augex models
We are the original developer of the repex and augex models used by the Australian Energy Regulator (AER) to assess the asset replacement and network augmentation elements of a business’ proposal.
We can apply these or similar models to assess these expenditure components of a business’ regulatory proposal.
Also we can often use these or similar models to make high-level and independent assessment of expenditure requirements due to a proposed change in rules, regulations, standards, or technology, which will effect network replacement and augmentation drivers.
We can also develop other assessment models for regulators or rule makers to suit their particular needs and data limitations.
If you’d like to discuss the suitability of these models or something similar to help assess a particular matter – even if it’s just a speculative enquiry – then please get in touch.