I.purc-eco.ResearchPapers.Unpublished.DesignIRC-SB-AM-RS November 6, 2000 Designing an Independent Regulatory Commission by Sanford V. Berg, Ali Nawaz Memon, and Rama Skelton ∗ Abstract This paper provides general guidelines and recommendations for introducing or refining an independent regulatory commission (IRC). The principles identified here can help policymakers decide on the basic design and structure of the IRC, its jurisdiction (whether single- or multi-sector) and its key regulatory functions. A well-functioning agency needs adequate resources, an appropriate legal mandate, and clear agency values and operating procedures. Indeed, if any of these conditions is lacking, the IRC will be unable to function in a way that promotes strong sector performance. Focusing on the electric power sector, we recognize that the process of reform is still evolving and that an agency's structure must permit it to adapt effectively to changing technological and market conditions. Our recommendations reflect international experience and best practice developments in the past two decades. ∗ The authors are, respectively, Director, Public Utility Research Center (University of Florida), Consultant (former Chairman of the Pakistan Electricity Regulatory Commission and World Bank analyst), and Consultant (former World Bank analyst). We have drawn on a number of studies and benefited from conversations with numerous individuals, including Warrick Smith, Praja Trivedi, Abdulrahman Al- Tuwejiri, Penelope Brook, and John Corlett. So we make no claim for originality. Rather, we have tried to draw together principles from our professional experiences, particularly with the PURC/World Bank International Training Program on Utility Regulation and Strategy. The views expressed here are solely those of the authors.