Abstract
This paper examines the opportunities available and the conditions needed for the deregulation of the Electricity Supply Industry (ESI), with particular reference to the Sultanate of Oman. The paper highlights the general issues of regulation required to encourage competition in the ESI. After that, the discussion focuses on regulation methods in the privatized ESI by describing the regulators control through price caps setting for regulatees, the conduct regulation process, the rate of return regulation setting, and the spot market (the pool) contract. Finally, the prospects of restructuring and privatizing the ESI in the Sultanate of Oman are examined by reviewing the current structure of the industry and government objectives in deregulation of the electricity sector as well as the regulation framework.