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Professor Dieter Helm
University of Oxford
15th March 2016
MARKETFORCE - THE FUTURE OF UTILITIES 2016
POLICY AND REGULATION FOR
UTILITIES:
WHERE DO WE GO FROM HERE?
• The British models as they have evolved
• The future interface between companies,
regulators and governments
• Where next?
The
competitive
model
The
RAB-based
model
The system
operator model
AGENDA
Retail
Wholesale
Co-ordination
& Network
System operator
MODEL ONE:
I. MORE COMPETITION
Peeling the onion back to the core monopoly
MODEL ONE:
II. AUCTIONS AND MORE RADICAL
IDEAS
• Trade-able RABs
• Trade-able RPI-X contracts
• Continuous auctions of OPEX and CAPEX
components
MODEL TWO:
LICENCES, USO AND THE RAB
• Core social primary goods & economic
infrastructures
• The long-term contract to provide the USO
• Time inconsistency & the cost of capital
• Debt vs. equity
• Internationally investible model
MODEL THREE:
SYSTEM OPERATORS – COMBINING THE
COMPETITIVE& RAB APPROACHES
• The minimal natural monopoly
• The focus for sectoral policies
• The focus for universal service obligators
• The core contractor
• The holder of the licence functions and obligations
• The guarantor of the RAB
THE FUTURE INTERFACES
In Rail
- The emergence of a system
operator
- Splitting out the parts
In Energy
- The central buyer model
- All power projects
determined by government
- The grid is SO
In Water
- The catchment based
approach
- Flooding
In Communications
- Openreach is the
new USO
WHAT NEXT?
• The government is back (if it ever left)
• Government determine broadband roll-out, almost
all energy investments, about all rail investments,
all roads, the energy networks and the water
investments.
• Emerging models a combination of competition &
RABs through the system operator model
• A(re) commitment to the USOs.
BOOK
S
www.dieterhelm.co.uk
• The road to re-regulation, Paper 7, Jan 2015
• Price setting in regulated utilities and the potential application to the BBC, Jan 2016
• How long can interest rates remain low? Nov, 2013
• British infrastructure and the Gradual return of the state, Nov 13,
• Why is infrastructure in Britain so difficult to deliver? Sep, 13
• The regulation of public service television, Sep 13
• What do to about the roads? Sep, 12
• The draft water bill – a critique, Sep 12
FOR INFORMATION
Regulation Network
Regulatory credibility and
the irresistible urge to
meddle
Dieter Helm
April 15
Regulation Network
What do to about the
railways
Dieter Helm
Sep 15
Regulation Network
The new broadband utility
and
the Openreach debate
Dieter Helm
Feb 16
www.dieterhelm.co.uk
Recent Online Publications

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Marketforce 15.03.16

  • 1. Professor Dieter Helm University of Oxford 15th March 2016 MARKETFORCE - THE FUTURE OF UTILITIES 2016 POLICY AND REGULATION FOR UTILITIES: WHERE DO WE GO FROM HERE?
  • 2. • The British models as they have evolved • The future interface between companies, regulators and governments • Where next? The competitive model The RAB-based model The system operator model AGENDA
  • 3. Retail Wholesale Co-ordination & Network System operator MODEL ONE: I. MORE COMPETITION Peeling the onion back to the core monopoly
  • 4. MODEL ONE: II. AUCTIONS AND MORE RADICAL IDEAS • Trade-able RABs • Trade-able RPI-X contracts • Continuous auctions of OPEX and CAPEX components
  • 5. MODEL TWO: LICENCES, USO AND THE RAB • Core social primary goods & economic infrastructures • The long-term contract to provide the USO • Time inconsistency & the cost of capital • Debt vs. equity • Internationally investible model
  • 6. MODEL THREE: SYSTEM OPERATORS – COMBINING THE COMPETITIVE& RAB APPROACHES • The minimal natural monopoly • The focus for sectoral policies • The focus for universal service obligators • The core contractor • The holder of the licence functions and obligations • The guarantor of the RAB
  • 7. THE FUTURE INTERFACES In Rail - The emergence of a system operator - Splitting out the parts In Energy - The central buyer model - All power projects determined by government - The grid is SO In Water - The catchment based approach - Flooding In Communications - Openreach is the new USO
  • 8. WHAT NEXT? • The government is back (if it ever left) • Government determine broadband roll-out, almost all energy investments, about all rail investments, all roads, the energy networks and the water investments. • Emerging models a combination of competition & RABs through the system operator model • A(re) commitment to the USOs.
  • 10. • The road to re-regulation, Paper 7, Jan 2015 • Price setting in regulated utilities and the potential application to the BBC, Jan 2016 • How long can interest rates remain low? Nov, 2013 • British infrastructure and the Gradual return of the state, Nov 13, • Why is infrastructure in Britain so difficult to deliver? Sep, 13 • The regulation of public service television, Sep 13 • What do to about the roads? Sep, 12 • The draft water bill – a critique, Sep 12 FOR INFORMATION Regulation Network Regulatory credibility and the irresistible urge to meddle Dieter Helm April 15 Regulation Network What do to about the railways Dieter Helm Sep 15 Regulation Network The new broadband utility and the Openreach debate Dieter Helm Feb 16 www.dieterhelm.co.uk Recent Online Publications