PRACTICE AREA | Regulation of Natural Monopolies

Castalia develops tailored approaches to regulate natural monopolies and advises firms on strategies to mitigate regulatory risk and maximise the value of regulated assets

Regulation should protect consumers from the exercise of market power, while preserving incentives for businesses to invest. A good regulatory system can benefit both consumers and businesses, while a poor system can destroy companies, and choke-off service to consumers.

To promote good regulation, Castalia works on:

  • Establishing regulatory frameworks: Developing good regulatory rules for controlling tariffs and service standards, and good institutions to apply those rules
  • Tariff determinations: Analyzing tariff structure and levels based on principles of economic regulation and detailed financial modelling
  • Setting service standards: Determining appropriate service delivery levels using common industry performance indicators and benchmarking against similar providers
  • Regulatory strategy: Advising companies on how to manage regulatory risks and maximize the value of regulated assets and cash flows, as part of their corporate strategy.