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The Regulatory Design Toolkit (RDT)
The primary role of the RDT is to provide a tool for selecting the form(s) of price regulation appropriate for industry specific application.
The available forms of price regulation span a spectrum of options – with the minutia of detailed application often having a material impact on performance.
It would not be feasible or useful to build an RDT that recommended one unique form for a given application.
The RDT will typically provide a narrowed set of workable options that provide broadly consistent outcomes
The RDT allows the operator to set out in what circumstances one would tend towards specific forms within the sub-set of options
An overly mechanistic approach to price regulation is not generally robust to practical application
The RDT has been built with the understanding that application to industry specific analysis would be further assessed by ESCOSA against a range of less tangible factors not amenable to assessment within the RDT.
The RDT has been designed such that it is robust to the range of industries ESCOSA may have regard to in the foreseeable future.
The RDT has been designed to a level of detail that balances robustness against usefully detailed findings.