Energy

Industry Restructuring and Privatization

NERA's Energy Group has applied its economic and regulatory expertise to energy sector restructurings and privatizations around the world. We have advised governments, regulatory authorities and enterprises on the economic policy questions raised by virtually every aspect of the energy industries, as well as on the creation of new regulatory and organizational structures, commercial relationships and market mechanisms.

We consistently promote the development of energy markets and attempt to minimize the role of regulation by structuring markets in a way that inherently requires less regulation. On the financial side, NERA has wide experience in issues of financing and the determination of the appropriate cost of capital for regulated utilities. These issues are fundamental in determining the market value of a firm and represent the first step in privatizing a company in a deregulated market. In addition to our regulatory work on industry reform, we have produced many cost-of-capital, market valuation, and financing studies for energy sector companies throughout the world.

NERA has assisted utilities, governments, the World Bank, European Bank of Reconstruction and Development, Asian Development Bank and other major development agencies in their efforts to further the development of energy industry restructuring, including privatizing and restructuring vertically-integrated state-owned monopoly enterprises into separate production, transportation, distribution and retailing/marketing companies. NERA has addressed the issues of industry structure, economic regulation, production, transport and distribution pricing. NERA has also conducted long-term studies for the state-owned companies in many sectors and have advised independent power producers promoting competitive conditions and the establishment of stable and well structured regulatory frameworks in those markets where restructuring is in a developing stage.

NERA has participated in nearly all of the energy market restructurings that have taken place around the world in the last two decades. We have been involved in many privatizations, working for both the sellers and the buyers, and we are often hired by governments and regulated companies to consult on regulatory issues post-restructuring.