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The North American public utility sector remains in the midst of a major transition. In many markets, the traditional regulatory model of cost-based, fully bundled service has been replaced by unbundled, market-based pricing for many utility products. Regulated distribution utilities are focusing more on mechanisms and procedures for purchasing services from wholesale suppliers, rather than constructing capacity. For those services that continue to be provided by regulated monopolies, performance-based ratemaking is replacing the existing model. In response to these regulatory changes, the industry structure continues to evolve. Mergers, acquisitions and divestitures are commonplace. The economics of market power are often as large a concern for regulators as are the economics of costs and rates. Regulators at the federal, state and provincial levels are developing policies to manage the transition, create competitive marketplaces where appropriate, and establish new regulatory regimes for the remaining regulated monopolies. IEc is an active participant in this process. We apply rigorous economic principles combined with high quality analysis to problems and issues that affect our clients, from analysis of industry restructuring, stranded cost determination, and unbundling to revenue requirements, cost allocation and rate design. In contrast to many utility industry consultants, IEc's experts have significant consulting experience outside of the utility arena, including work in international mining and metals industry restructuring, economic damage assessment in litigation, and business planning. This experience provides us with a broader perspective on the relevant issues facing industries in transition.
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