Rate Regulation refers to the process by which government agencies oversee and control the prices charged by public utilities and service providers. This regulation aims to ensure that consumers receive fair prices while allowing companies to cover their costs and earn a reasonable return on investment. Typically applied to industries like electricity, water, and telecommunications, Rate Regulation helps prevent monopolistic practices and protects consumers from excessive charges. Regulatory bodies, such as the Public Utility Commission, evaluate proposed rate changes and ensure that they are justified based on operational costs and market conditions.