Funding

Funding

The two key considerations regarding the funding of regulators are those of adequacy and incentive effects:

• access to sufficient resources to allow it to carry out its assigned functions effectively
• funding must be supplied in ways that do not risk distorting the decisions that regulators are required to make

Level of funding depends on the number of functions, enterprises it regulates; customers the enterprises serve; or licenses awarded. It also depends on the frequency of tariff proceedings; complexity of the sector for which it is responsible; the extent to which the details of its funding sources and processes have been specified in the law or decree establishing the agency.