The CAA has today published a report by First Economics which looks at 'price monitoring' as an alternative to RAB-based regulation of UK airports. The report can be accessed here.
19 April 2012: Utility Regulator publishes price control proposals for NIE
The Northern Ireland Utility Regulator has today published initial price control proposals for NIE. The cost of capital in these proposals is based on a report prepared by First Economics. The report is available here .
1 July 2011: Report on alternative approaches to efficiency assessments and economic incentives published
UK Water Industry Research has published a report on possible alternatives to Ofwat's methods of efficiency assessment and possible new ways of designing opex and capex incentives. The report, authored by First Economics, compares the value of econometric models to other forms of benchmarking techniques and 'bottom-up' challenges to efficiency. It also analyses Ofgem's supposedly equalised expenditure incentives and examines whether water companies ought to be exposed to similar incentives in future control periods.
1 June 2011: Sir Roy McNulty's report on value for money in the railway published
The DfT and ORR have today published the independent report they commissioned from Sir Roy McNulty on value for money in the GB railway. First Economics carried out a number of pieces of advisory work for the study team, covering issues such as asset ownership, Network Rail's corporate governance and possible new industry structures.
19 October 2010: CAA's price control proposals for NATS published
The CAA has today published its proposals for NATS' price controls for the period 2011 to 2014. First Economics has been acting as an adviser to the CAA during the review.
1 May 2010: Frontier shift
First Economics has today published a new report on the subject of frontier shift. It looks at the analysis that has been carried out since we first questioned why it was that regulators were assuming that regulated companies should be expected to go on reducing opex in real terms indefinitely. It also highlights a number of areas where we think that further work is still required.
The report can be accessed here .
21 April 2010: Financeability
First Economics has today published a new report on the subject of financeability. It questions the proposition that companies which fail regulators' financeability tests should be expected to raise new equity and argues instead that NPV-neutral advancement of revenue is the most appropriate regulatory response to weak financial ratios.
The report can be accessed here .
7 December 2009: Ofgem's final electricity distribution price control proposals published
Ofgem has today published its final proposals in the 2009 periodic review of electricity distribution price controls. First Economics worked with the electricity DNOs during the review, playing a central role in debates about future input price inflation and the scope for efficiency improvement.
26 November 2009: Ofwat determination of water and sewerage price controls published
Ofwat has today published its final determination in the 2009 periodic review of water and sewerage charges. First Economics has been a key adviser to the industry during the periodic review process, working at various stages with Anglian Water, Northumbrian Water, South East Water, Thames Water, United Utilities, Wessex Water and Yorkshire Water, as well as the industry association Water UK.
5 March 2009: Estimation of betas
The CAA has today published a report by First Economics which provides a preliminary estimate of NATS' asset beta.
The report can be found here
4 November 2008: Competition Commission inquiry report published
The UK's Competition Commission has today published its recommendations on the price control that should apply at Stansted airport. John Earwaker, Principal, First Economics, has been acting as the Commission's expert adviser on cost of capital.
The Commission's report can be found here
1 June 2008: Assessment of risk in the UK's regulated industries
The Office of Rail Regulation has today published a report by First Economics which compares the riskiness of regulated companies in the airport, electricity, gas, rail and water sectors.
The report can be accessed here
1 May 2008: Efficiency study
Water UK commissioned First Economics to advise on the rate of frontier shift affecting water industry operating expenditure. Our report is available here.
1 May 2008: Competition Commission price control inquiry
The UK's Competition Commission has appointed First Economics to be its expert adviser on cost of capital issues during its inquiry into price control arrangements at Stansted airport.
The Commission's inquiry homepage can be accessed here
1 February 2008: Dates for next training course announced
The next Periodic Review Training Course will be take place over two days on 14 and 20 May 2008. Designed for individuals with first-hand experience of regulation who wish to expand or refresh their skills, the course covers some of the more advanced concepts that appear in regulation and aims to equip participants with the knowledge that they require in order to engage fully in reviews affecting their organisation.
Further information and a course brochure can be found here.
4 October 2007: Competition Commission airport inquiry report published
The UK's Competition Commission has today published its recommendations on the price controls that should apply at Heathrow and Gatwick airports. John Earwaker, Principal, First Economics, has been acting as the Commission's expert adviser on cost of capital.
The Commission's report can be found here
22 May 2007: Competition Commission/University of Exeter cost of capital conference
John Earwaker, Principal, First Economics, spoke at the Competition Commission/University of Exeter cost of capital conference on 7/8 June 2007. His presentation examined the proposition that regulators should index the allowed rate of return in line with the prevailing risk-free rate/cost of debt.
More information about the conference can be found here
30 April 2007: New report on efficiency and 'frontier shift'
First Economics has produced a new report on the rate of 'frontier shift' affecting regulated companies' costs. It argues that regulators are wrong to expect companies to go on reducing operating expenditure in real terms indefinitely, and suggests instead that it is a sufficient challenge to ask companies privatised in the 1980s and early 1990s to hold their costs in line with RPI.
The report can be found on Ofgem's website and here
8 February 2007: Water UK 2007 City Conference
John Earwaker, Principal, First Economics spoke at the 7th annual Water UK City Conference in a session entitled 'A cross-sector view - lessons from other utilities'.
Further details of this event can be found here
15 November 2006: Economic Regulation Forum
First Economics has launched a new group for Regulation Managers/Directors from across the regulated sectors. Every quarter the group examines the latest developments from the periodic reviews taking place in the aviation, energy, transport and water sectors, helping participants to identify and deal with the key emerging issues.
If you are interested in participating in these sessions, further details can be found here
31 August 2006: Dates for training course announced
The next Advanced Utility Regulation training course will be take place over two days on 22 and 30 November 2006. Designed for individuals with first-hand experience of regulation who wish to expand or refresh their skills, the course covers some of the more advanced concepts that appear in regulation and aims to equip participants with the knowledge that they require in order to engage fully in reviews affecting their organisation.
Further information and a course brochure can be found here
1 May 2006: Further thoughts on financeability
On 27 April 2006, John Earwaker, Principal, helped to facilitate the discussion at the joint Ofgem/Ofwat 'Financing Networks' seminar. We have also produced a short briefing note highlighting what we consider to be the key issue in the debate about financeability: the fact that regulators allow companies a real return on the RAB at a time when most businesses pay interest in nominal terms to their lenders.
Our note can be accessed here
12 December 2005: Efficiency
First Economics has produced a briefing paper on the influence that changes in the drivers of inflation are having on regulated companies' ability to meet efficiency targets.
The paper shows that a sharp slowdown since 1999 in the rate of inflation affecting goods such as food, clothing and motor vehicles has helped maintain RPI-measured inflation at 2.5% despite an acceleration in inflation across the rest of the economy. We argue that it is now more difficult for companies to hold opex in real terms and suggest that the productivity improvements that must be delivered in order to meet regulators' targets might have increased.
The full paper can be accessed here.
7 December 2005: Postcomm publishes final proposals for Royal Mail's price control
The UK's Postal Services Commission has published its final proposals for the price control that will apply to Royal Mail from April 2006. John Earwaker, Principal Consultant at First Economics, has been acting as an adviser to Postcomm on issues relating to quality of service, efficiency and cost of capital.
The consultation document can be found here
24 August 2005: Dates for training course announced
The next Advanced Utility Regulation training course will be take place in November/December 2005. Designed for individuals with first-hand experience of regulation who wish to expand or refresh their skills, the course covers some of the more advanced concepts that appear in regulation and aims to equip participants with the knowledge that they require in order to engage fully in reviews affecting their organisation.
Further information and a course brochure can be found here
1 June 2005: Postcomm publishes initial proposals for Royal Mail's price control
The UK's Postal Services Commission has published its initial proposals for the price control that will apply to Royal Mail from April 2006. John Earwaker, Principal Consultant at First Economics, is acting as an adviser to Postcomm on issues relating to quality of service and efficiency.
The consultation document can be found here
24 May 2005: The CAA publishes firm proposals for NATS' price control
The UK's Civil Aviation Authority has published its firm proposals for the price control that will apply to National Air Traffic Services from 2006. First Economics has acted as an adviser to the CAA throughout the course of the review.
The proposals document can be found here
4 April 2005: Financeability
First Economics has produced a briefing paper on what we see as the key issue in regulation today: financeability.
The paper examines why regulators across the UK utility sector have been discovering that the conventional 'building block' model of price setting does not always make regulated companies financeable in the perception of investors and rating agencies - and why allowing firms returns in excess of the cost of capital may not necessarily be the best way to deal with the problem.
The full paper can be accessed here
6 January 2005: The 2004 Water and Electricity Distribution Periodic Reviews - Issues and Implications
First Economics has produced a new report looking at the main themes and issues emerging from the recent determinations by Ofwat and Ofgem.
The report provides a comprehensive summary of the main building blocks within the two regulators' final conclusions and assesses how far there is consistency in the two methodologies. It is written specifically for individuals who wish to understand fully the decisions that the regulators have reached -- and particularly the precedents that these decisions set for future reviews -- but who require only a concise overview of the key points and expert analysis of the implications.
Further details and an order form can be downloaded here
