-based regulation to strengthen the necessary investment incentives. Regulatory emphasis is shifting from costreductions to promoting … investment. Obstacles to investments arise in particular from regulatory risk and efficiency risk. Addressing these topics, we …

The paper provides a tractable, analytical framework to study regulatory risk. Regulatory risk is captured by … funds. Results are as follows: 1) The regulator's reaction to regulatory risk depends on the curvature of aggregate demand …. 2) It yields a positive information rent effect exactly when demand is convex. 3) Firms benefit from regulatory risk …

The paper provides a tractable, analytical framework to study regulatory risk under optimal incentive regulation …. Regulatory risk is captured by uncertainty about the policy variables in the regulator's objective function: weights attached to … profits and costs of public funds. Results are as follows: 1) The regulator's reaction to regulatory risk depends on the …

dynamic generation settings. Through application in a stylized two-node network, we find that incentive regulation may perform … motivates further research aimed to characterize optimal regulation for transmission expansion in the context of renewable …

-efficient production level for an incentive regulation of distribution system operators (DSOs). With nearly 900 DSOs operating in the … German electricity sector, of which 200 subject to incentive regulation, the issue of heterogeneity of DSOs has to be …

To date, the distributive implications of incentive regulation on electricity transmission networks have not been … efficiency under price-cap regulation have not yet been identified. To discern these parameters is the motivation for the … price-cap incentive regulation for electricity transmission. We find that a regulator's use of ideal (Laspeyres) weights …

The informationally simple approach to incentive regulation applies mechanisms that translate the regulator’s objective …