Utility Tariff Setting for Economic Efficiency and Financial Sustainability - A Review
Gunatilake, Herath; Perera, Pradeep; Jose, Mary Jane F. Carangal-San | August 2008
Abstract
This paper reviews the literature on utility tariff setting with an emphasis
on economic efficiency and financial sustainability. The paper first discusses the
merits as well as practical limitations in applying marginal cost pricing. It then
presents details on estimation of revenue requirements of utilities under two
regulatory regimes: rate of return regulation; and performance-based regulation.
Finally, the paper discusses how to set tariffs when an enabling environment for
achieving both financial sustainability and economic efficiency is lacking. Under
such circumstances, the paper argues that initial focus should be on cost recovery.
As the enabling environment improves, goals of tariff setting can include broader
objectives. The success of such a gradual approach depends on: (i) participatory
and rigorous analytical work to assess the feasibility of the type of tariff; and
(ii) policy and institutional reforms, regulatory enhancements, and performance
improvements of the utility to create an enabling environment for implementing
advanced types of tariffs.
Citation
Gunatilake, Herath; Perera, Pradeep; Jose, Mary Jane F. Carangal-San. 2008. Utility Tariff Setting for Economic Efficiency and Financial Sustainability - A Review. © Asian Development Bank. http://hdl.handle.net/11540/2341. License: CC BY 3.0 IGO.ISSN
1655-5236
Keywords
Trade Finance
Risk Financing
Regional Development Finance
Public Finance
Infrastructure Financing
Financing of Infrastructure
Financial Security
Financial Intermediation
Finance And Trade
Enterprise Financing
Trade Regulation
Trade Finance
Regional Trade Agreements
General Agreement On Tariffs And Trade
Taxation
Business Financing
Investment Requirements
Capital Needs
Tax Incentives
Project Risks
Tariff agreements
Customs convetions
Import policy
Export policy
Investments
Finance
Market
Markets
Use tax
Tax administration and procedure
Taxing power
Effect of taxation
Business enterprises
Foreign trade and employment
Mentoring in business
Trade routes
Show allCollapse
Citable URI
http://hdl.handle.net/11540/2341Metadata
Show full item recordUsers also downloaded
-
Annual Report 2014: Operational Data
Asian Development Bank (Asian Development Bank, 2015-01-01)The page has additional information for the ADB Annual Report 2014. In 2014, the Asian Development Bank (ADB) approved $22.93 billion in development assistance, including $13.69 billion financed by ADB’s ordinary capital resources and special funds, and a record $9.24 billion by cofinancing partners. Disbursements totaled $10.01 billion, an increase of $1.47 billion (17%) from 2013, and the first ...The page has additional information for the ADB Annual Report 2014. In 2014, the Asian Development Bank (ADB) approved $22.93 billion in development assistance, including $13.69 billion financed by ADB’s ordinary capital resources and special funds, ... -
An Information Guide to the Consultation Phase of the ADB Accountability Mechanism
Asian Development Bank (Asian Development Bank, 2008-06-30)We, at the Office of the Special Project Facilitator, are ready to listen to your complaints with the aim of finding satisfactory solutions to problems. We provide an independent forum for people and communities who have been adversely affected by an ADB-assisted project. We handle the Consultation Phase, which involves a series of activities and dialogue with all concerned parties to reach a good ...We, at the Office of the Special Project Facilitator, are ready to listen to your complaints with the aim of finding satisfactory solutions to problems. We provide an independent forum for people and communities who have been adversely affected by an ... -
The Provincial Performance Improvement Initiative Papua New Guinea: A Case Study on Subnational Capacity Development
Saldanha, Cedric (Asian Development Bank, 2008-06-30)The Provincial Performance Improvement Initiative (PPM) is a Papua New Guinean (PNG) Government undertaking that seeks to improve public administration at the subnational level. The case study describes how PPM has benefited from "enthusiastic leadership" and a high level of PNG ownership. The initiative has also built on a systematic diagnosis of capacity issues, with PNG stakeholders playing a ...The Provincial Performance Improvement Initiative (PPM) is a Papua New Guinean (PNG) Government undertaking that seeks to improve public administration at the subnational level. The case study describes how PPM has benefited from "enthusiastic leadership" ...