Thursday 29 June, 2017

Regulation

Indecon brings economic, financial and strategic tools to bear on problems facing companies, regulators and policy makers. Our advice is underpinned by a thorough understanding of the economic forces driving markets, industries and company decision-making processes within specific institutional, legal and regulatory environments.

In addition to conceptual and qualitative analysis, we have expertise in applying a wide range of quantitative tools, including econometrics, financial modelling, non-parametric techniques and simulation modelling.

We are experienced in advising regulated firms, government agencies and regulators in all major areas of regulatory economics and strategy, including

  • Optimal pricing and product design;
  • Design and review of regulatory measures;
  • Real and financial asset valuation;
  • Development of regulatory compliance processes;
  • Regulatory impact assessment;
  • Market design; and
  • Market power measurement and mitigation.

Indecon has completed numerous projects in all major regulated industries, including electricity and gas, financial services, electronic communications and broadcasting, postal services, water and transport.

Contact link:

For further info on Indecon's regulatory economics consulting services, please email regulation@indecon.ie or contact us at the following address:

Indecon House
4 Fitzwilliam Place
Dublin 2, Ireland
Tel: + 353 (0)1 677 7144
Fax: + 353 (0)1 677 7417

Sectors

  • Strategic audits and competitor analysis. We can help clients gain a better understanding as to which of their competences are sustainable and not easily replicated by rivals.
  • Modelling - we use state of the art modelling techniques (such as, for example, advanced econometric analysis and simulation models) to analyse the commercial and financial implications of business decisions.
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    Aviation
    We have worked with airport authorities, airlines and regulatory bodies in a number of countries, and we are familiar with the key economic issues facing participants in the sector.

    Our work in the aviation sector has included projects on facilities capacity and investment appraisal, estimation of value added, corporate governance structures, price setting and regulation of charges, access to passenger information, and evaluation of publicly funded infrastructure programmes, as well as competition policy and anti-trust cases.

    Clients include central government departments and state agencies, airport authorities and airlines.

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    Electronic Communications and Broadcasting
    Our experience in the electronic communications and broadcasting sector has grown out of the firm's involvement in the liberalisation of EU communications markets. Our staff are drawn from varied backgrounds, with experience working for regulators, government, academia and the private sector. We have advised both private companies and regulatory bodies on a variety of economic and strategic issues. Indecon has particular expertise in the following areas:

    • Regulatory policy, including pricing, costing, network access, quality of service and consumer protection issues;
    • Business strategy;
    • Demand analysis;
    • Corporate governance models;
    • Efficiency measurement;
    • Definition and costing of public service obligations;
    • Issues relating to intellectual property (e.g. sports and music rights);
    • Competition policy, including market definition, assessment of market power and modelling of market entry;
    • Financial modelling, including assessment of cost of capital; and,
    • Cost-benefit analysis.

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    Electricity and Gas
    Indecon has considerable expertise in the electricity and gas sectors, with particular experience in regulation and liberalisation of these sectors. We have experience working for EU and international utilities, regulators, legal firms and government agencies. Our staff have been deeply involved in energy liberalisation in the UK, North America, Ireland and the EU. Indecon has particular expertise in the following areas:

    • Regulatory pricing, including estimating X factors, cost of capital, and the regulatory asset base;
    • Asset valuation for financing;
    • Contract analysis, including:
      • Estimation of damages from energy contract disputes; and,
      • Selection of benchmark indices for contract pricing.
    • Regulatory strategy;
    • Demand analysis, including:
      • Estimation of demand elasticities; and,
      • Demand forecasts.
    • Corporate finance and financial strategy;
    • Efficiency measurement of transmission and distribution networks;
    • Incentive regulation;
    • Competition policy, including:
      • market definition;
      • assessment of market power;
      • estimation of market structure indices; and,
      • and modelling of market entry.
    • Financial modelling, including assessment of cost of capital and marginal effective tax rates.

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    Postal
    Indecon has advised postal administrations, regulators, communications ministries and other regulated utilities in the Ireland and in other European countries. Our experience includes:

    • Design and implementation of regulation;
    • Pricing policies;
    • Cost modelling and efficiency analysis;
    • Market analysis;
    • Measuring the impact of liberalisation;
    • Costing of universal service;
    • Quality of service assessments;
    • Business strategy; and,
    • Cost-benefit analysis.

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    Transport
    Indecon's expertise in transport economics spans the roads, aviation, passenger and freight rail, bus and ferry sectors. We have carried out public expenditure reviews, customer demand modelling, regulatory and policy advice and competition casework in the sector. We have undertaken evaluations of proposed investments in a variety of areas including assessments of the costs and benefits of proposed investments. We recently completed a major study of public transport investment in buses, inter-city rail and the Luas. We also completed the mid-term evaluation of the transport aspects of the National Development Plan. Key competencies include policy and programme evaluations (including on the National Development Plan), projects assessments, regulatory impact assessment and general policy advice.

    Recent clients include the Department of Transport and Forfás.

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    Water
    Indecon and our associated practice have extensive expertise in the water sector. This includes experience in estimating the potential for efficiency gains, benchmarking, and estimation of the trade-offs between financial costs and environmental benefits. We also have experience working for EU and international utilities, regulators, legal firms and government agencies. Our staff have been deeply involved in water regulation and liberalisation in the UK, and North America. Our experience includes:

    • Regulatory pricing, including estimating X factors, cost of capital, and regulatory asset base;
    • Economic valuation of human health risks;
    • Cost modelling of marginal costs of abatement;
    • Cost benefit analysis;
    • Asset valuation for financing and public private partnerships;
    • Demand analysis, including:
      • Estimation of demand elasticities; and,
      • Demand forecasts.
    • Financial policy of government and local authority owned utilities;
    • Efficiency measurement of distribution system;
    • Financial modelling, including assessment of cost of capital, marginal effective tax rates, and local authority public private partnerships.

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    Environment
    Indecon's expertise in environmental economics covers the key issues facing policy makers in Ireland. We have undertaken several studies examining options to minimise the cost of meeting Ireland's Kyoto obligations. These include evaluations of the impact of environmental taxation and emissions trading. We have detailed knowledge in relation to emissions trading and have undertaken an analysis of the impact of emissions trading, in addition to drafting Ireland's National Allocation Plan for the Environmental Protection Agency. We also have a detailed understanding of the impact of environmental issues on the industrial sector and on the competitiveness of the enterprise sector in Ireland. We have examined a wide range of other environmental issues, including waste and water supply issues.

    Key competencies include policy design and evaluation, and modelling the costs of different policy options. Indecon's consultants have presented several conference papers on these issues and recent clients include the Environmental Protection Agency, Department of Environment and Local Government, Department of Enterprise, Trade and Employment, and Forfás.

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