Replacement Cost Asset Valuation and Regulation of Energy Infrastructure Tariffs.
In Australia, access tariffs (rental charges) paid by third party users to the owners of energy transmission assets (e.g., gas pipelines) are determined by regulators on the basis of their depreciated optimized replacement cost (known as DORC). Reliance on the replacement cost, rather than actual co...
| Publicado en: | Abacus Vol. 39; no. 1; pp. 1 - 42 |
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| Formato: | Artículo |
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Wiley-Blackwell
Feb2003
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=hlh&AN=9584920&site=ehost-live header: @attributes: shortDbName: hlh uiTerm: 9584920 longDbName: Humanities International Complete uiTag: AN controlInfo: bkinfo: jinfo: jid: 00013072 AUB jtl: Abacus issn: 00013072 maglogo: Y pubinfo: dt: Feb2003 vid: 39 iid: 1 pid: 480 pub: Wiley-Blackwell artinfo: ui: 9584920 10.1111/1467-6281.00118 ppf: 1 ppct: 41 formats: fmt: – @attributes: type: T – @attributes: type: P size: 198KB tig: atl: Replacement Cost Asset Valuation and Regulation of Energy Infrastructure Tariffs. aug: au: Johnstone, D. J. affil: University of Wollongong. su: Rent charges (Feudal law) Energy transfer Natural gas pipelines Rate of return Industrial equipment replacement cost accounting Australia sug: subj: Australia Rent charges (Feudal law) Energy transfer Natural gas pipelines Rate of return Industrial equipment replacement cost accounting keyword: Asset valuations Infrastructure Replacement costs Tariffs ab: In Australia, access tariffs (rental charges) paid by third party users to the owners of energy transmission assets (e.g., gas pipelines) are determined by regulators on the basis of their depreciated optimized replacement cost (known as DORC). Reliance on the replacement cost, rather than actual cost, of existing assets inflates tariffs and incites the criticism that asset owners earn a return on investments of a scale never made. The economic rationale of the regulators’ model is that it emulates the workings of a contestable market, by setting tariffs at a level just short of that required to motivate a new entrant (system duplication). Properly reconstructed, this model constitutes a dynamic and internally consistent theory of replacement cost valuation and depreciation. Its mathematical consequences, however, especially with regard to the valuation of sunk assets with long times to expiry, are shown to be practically and politically unpalatable. In particular, the implied tariff levels for such assets are very close to those that would apply to new infrastructure assets built today at today's prices. Regulators unwilling to accept this implication of a new-entrant-exclusion pricing logic are left with no alternative framework for DORC. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: Y custom: Copyright of Abacus is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. item: Abacus holder: Wiley-Blackwell dt: @attributes: year: 2003 holdings: @attributes: islocal: N |
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