A Contract Design Perspective on Balancing the Goals of Utility Regulation

Anita Eskesen*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Designing utility regulation involves trade-offs between different goals of contract design. Prioritising one objective may come at the cost of assigning a lower priority to another objective. This study compares four regulatory frameworks in terms of how they each prioritise different goals of contract design. While revenue-cap regulation can be said to minimise transaction costs, it also assigns a lower priority to coordination of production. Conversely, the frameworks that explicitly incorporate stakeholder engagement or negotiation prioritise coordination of production while assigning a lower priority to minimisation of transaction costs.
Original languageEnglish
Article number101161
JournalUtilities Policy
Number of pages13
ISSN0957-1787
DOIs
Publication statusPublished - 21 Jan 2021

Bibliographical note

Epub ahead of print. Published online: 21 January 2021.

Keywords

  • Incentive regulation
  • Customer engagement
  • Contract design

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