Regulation and networks

regulatory electricity gas water telecommunications network

Natural monopoly infrastructure, such as energy or transport networks, can be transferred to corporate ownership provided there is adequate regulation to curb the misuse of monopoly pricing power. Strategex advises on strategy, undertakes analysis, and prepares regulatory submissions.

Network businesses benefit from the breadth of our regulatory experience, having worked for both regulators and regulatees, across a wide range of industries. Business with long regulatory history, such as energy networks, can use us to test their strategy and analysis. Clients that are unfamiliar with economic regulation, such as transport, can plan future regulatory strategy and structure their affairs to minimise impacts.

For example, we can prepare revenue building blocks including:

  • regulatory asset bases (RAB), for example, using Optimised Replacement Cost (DORC) valuation
  • appropriate weighted average cost of capital (WACC)
  • efficient capex and opex, for example, using benchmarks
  • demand forecasts
  • pricing principles.

Boards and senior management have confidence in our strategic advice that combines investors’ expectations with regulators’ requirements.

Email or call Strategex today for help with regulatory strategy, analysis and submissions.

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image water flowing from burdekin dam
Sunwater water pipeline

David Adams modelled pricing for Sunwater pipelines.