Dr. Richard Hern

Managing Director


Tel: +44 20 7659 8582
Fax: +44 20 7659 8501

Tel: +49 30 700 1506 01

Email: richard.hern@nera.com
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PhD in economics, Bristol University
MSc in economics and public policy, Bristol University
BSc in economics and mathematics, Bristol University


Dr. Hern is a Managing Director in NERA's London and Berlin offices and leads NERA's Regulatory Finance team in London. He has over 18 years' experience with private sector consulting, following university research and teaching. He specialises in economic and valuation issues in the power, water, transport, and telecom sectors. He has over 18 years of experience as a professional economist and has worked in countries throughout Europe as well as in the US, Asia, and Latin America.

Dr. Hern's experience spans company valuation, regulation, privatization of state-owned utilities, and regulation of network industries. Other areas of interest include commercial damages, assessment of regulatory risks, due diligence support, and tariffs. He is a specialist in risk and cost of capital issues and has published articles on risk and the cost of capital in a variety of utility and trade journals, including several books on best practice in estimating the cost of capital for infrastructure assets.

Prior to joining NERA, Dr. Hern taught economics courses at Bristol University and Bath University.

Industry Experience

Dr. Hern has worked extensively on issues concerning economic regulation of network industries across the world. In the UK he has worked on regulatory matters in the water, energy, telecom, rail, and airport sectors. He has also advised the UK Competition Commission on cost of capital estimation techniques, profitability analysis, and the estimation of the impact of regulatory risk.

He has also advised UK clients on competition policy matters involving profitability analysis, including confidential matters such as excessive pricing complaints and state aid complaints. He was NERA’s lead advisor to a major UK water company regarding the development of access pricing arrangements under the 2000 Competition Act.

Internationally, Dr. Hern has worked on economic regulatory issues in over 20 countries across the world, including in Europe, Latin and South America, Singapore, Korea, Africa, and Australia. In 2004 and 2009, Dr. Hern was appointed the Independent Expert to rule on an appeal by Belize Water Services against the price decision by the Public Utilities Commission of Belize. In 2004-05, Dr. Hern directed a team of engineers and economists to conduct the first full tariff review for a major water concession in San Pedro Sula in Honduras. Dr. Hern has also advised the World Bank on the formulation of Regulatory Transparency Guidelines for utility regulators in Africa, and mechanisms to reduce regulatory and political risk in developing countries.

He has also prepared expert testimony on a wide range of economic and finance issues including commercial damages, valuation in the context of political intervention, contract disputes, and regulatory tariff disputes. He has appeared as an expert witness before a number of panels, arbitrators, and tribunals including the ICC, PCA, UNCITRAL, and the UK Competition Commission.  

Recent arbitration experience includes:

  • Five expert reports and oral testimony in arbitration (ICC) on a dispute between a Latin American water concessionaire and the government. The reports focus on economic issues concerning the tariff setting methodology for water customers (2012-2014).
  • Expert testimony and oral cross examination under UNCITRAL rules for Maynilad Water on cost of capital and tax issues in arbitration proceedings concerning the 2013 water tariff review in Manila, Philippines (2012-2014).
  • In an international arbitration before the Permanent Court of Arbitration (PCA), expert testimony on the compensation due to shareholders of Belize Telemedia following the renationalisation of the company. The client is the Government of Belize (2011-2014).
  • For an Asian electricity company: consulting expert on the valuation of a potential energy acquisition in Indonesia, in the context of an ICC arbitration over a failed joint venture (2011-2013).
  • Expert testimony under UNCITRAL rules for Manila Water on the Appropriate Discount Rate in arbitration proceedings concerning the 2013 water tariff review in Manila, Philippines (2012-2014).
  • For DESFA, the Greek national gas transport company, expert report in an arbitration (ICC) on a dispute concerning a gas pipeline construction contract. The case involved analysis of the differences in the scale, scope, difficulty, and duration of the particular project by comparison to comparable projects in the region (ICC, 2010).
  • Project leader in a commercial arbitration regarding a BOT water plant in Turkey. The case involved issues such as treatment of foreign exchange financing gains, formula for cost escalations, and calculation of project returns (VIAC.  2007).
Title Type Author
The Cost of Equity for Utilities – An International Perspective Presentation Dr. Richard Hern
Hurdle Rates and the Cost of Capital for Financing Electricity Generation in the UK Study By Dr. Richard Hern, Daniel Radov, Alon Carmel, Marija Spasovska, and Jinzi Guo
Use of Inflation Indices in Water Sector Report By Dr. Richard Hern, Dr. Bill Baker and James Grayburn
Estimation of BT's Equity and Asset beta Report by Dr Richard Hern and Dominik Hübler
Changes in Hurdle Rates for Low Carbon Generation Technologies due to the Shift from ... Report By Dr. Richard Hern, Daniel Radov, et al.
Expert Report Dr. Richard Hern
Critique of Report for the NMa on the Cost of Capital Report By Graham Shuttleworth, Dr. Richard Hern, and Dominik Huebler
The Cost of Capital for Merchant Power Generation: The Example of Drax Brief By Tomas Haug and Dr. Richard Hern
Area Cost Adjustment: A Response to the Department for Communities and Local Governme... Report By Dr. Richard Hern with Professor David Blanchflower of the Dartmouth College Department of Economics
The Evidence for a Small Company Premium on the Cost of Capital at PR09 and A Review ... Report By Dr. Richard Hern, Tomas Haug, Anthony Legg, Mark Robinson, Dominik Huebler, and Svetlana Shcherbakova