Question Time: Regulatory Asset Base
What is a Regulatory Asset Base (RAB)? How important is it for climate change, energy transition, and net zero?
Is there a difference between a RAB and a RAV (Regulatory Asset Value)? Is there a difference between a RAB and a RCV (Regulatory Capital Value)? Is there a difference between a RAB and a TRV (total regulatory value)? Or are those all basically the same thing?
Are RABs used as a financing vehicle to raise money from the private sector? Are RABs an IOU from customers to investors? Or are RABs also used for public financing? If so, is the idea there to simply track the amount that customers owe back to the public?
If every asset is someone else's liability, whose liability is the RAB? Does the liability belong to customers, the regulator, the government, someone else, or a combination of these other parties?
Are these (RAB, RAV, etc.) always assets? Financial assets or physical assets? Are they generally regulated in the same way?
What's a "split RAB"? Has it been done anywhere or just talked about by people like Dieter Helm?
Is the RAB shown in accounting statements? What's the difference between an accounting asset and a regulatory asset? Are RABs always depreciated to zero? What's the difference between "Regulatory Depreciation" and "Accounting Depreciation"? Who decides? The accountants or the regulators? Or does it depend?
Can a RAB be used for any type of asset? Any type of infrastructure? Any type of energy transition?
If RABs are successful in some sectors, such as energy transmission and distribution, could they also be used for energy generation? What about energy retail?
If RABs are typically used for electricity, gas, and water assets, would many adjustments be needed to deploy them for nuclear energy? Or for carbon capture (CCS, CCUSE)? What about hydrogen? Are RABs also used for other sectors such as airports, telecoms, and railways??
Are RAB calculations generally similar? Why are some RABs calculated at real prices while others are calculated at nominal prices? Is there a meaningful difference, or is the difference presentational? Why do some RAB calculations include working capital while others don't? Why do some RABs have additions for inflation while others don't? Why do some RABs have pension costs added while others don't? Why do some RABs have incentives added while others don't??
Why do some RABs have a discounted closing value while others don't? Why does Ofgem discount the closing value before calculating the average RAB and applying the WACC return to that smaller average RAB?
Do all RABs carry similar risks? If the regulator is the same, will the RAB risk be the same? If not, why would the regulator use the same WACC?
How many answers depend on the country, the regulator, the sector, the technology, or the time period?
What's a "RAB multiple"? Does it differ from a MAR (a market-to-asset ratio)? Or are those the same thing?
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Airline Executive
9 个月The CAA has described LHR’s RAB as not an absolute register of assets, but a ‘indicator of the value invested by shareholders’! In other words, it is just a lever for HAL to pull when it wants to increase dividends. We saw this clearly evidenced in the pre-R3 posturing and then again post-Covid. In a nutshell, the RAB is a guarantee provided by the CAA that consumers will pay whatever HAL demands.