Price Controls 140 · On-demand course
A recorded course from MCC Economics on how capital expenditure (capex) is assessed and built into price controls, from business plan checks and cost benchmarking to its effect on the asset base and allowed revenue, with examples from RIIO-ED2 and Ofwat's 2024 price review.
Price Controls 140 is delivered by practitioners who review business plans and model price controls for regulators, governments and utilities.
Course lead
Director, MCC Economics
PJ has worked on price controls from the regulator's side and for regulated companies, including RIIO-2 work with Ofgem and the Utility Regulator for Northern Ireland.
I heartily recommend PJ to anyone seeking input on the financial parameters that underpin different regulatory models.
Price Controls 140 is a recorded course on how regulators review and approve capital expenditure. It explains why regulators oversee capex, how they evaluate business plans with cost benchmarking and top-down and bottom-up assessment, and how approved capex feeds the Regulatory Asset Base and allowed revenue, using RIIO-ED2, Ofwat's 2024 price review and regional models as examples.
You will be able to follow how a capex allowance is set and how it flows through to customers' bills. The course is built around three outcomes.
The lecture explains what capex is in a price control and why regulators oversee it, then shows how it is assessed.
These are the terms the course uses most, in plain English. Ofgem is the Office of Gas and Electricity Markets; Ofwat is the Water Services Regulation Authority.
| Term | Meaning |
|---|---|
| Capital expenditure (capex) | Spending on new or replacement assets, such as cables, pipes and substations, that last for many years. |
| Regulatory Asset Base (RAB) | The value of past investment that a company may earn a return on and recover over time. Approved capex is added to it. |
| Asset base roll-forward | The yearly update of the asset base: opening value plus approved capex, minus depreciation. |
| Business plan | A company's proposal to the regulator setting out the spending and outputs it plans for the next price control. |
| Cost benchmarking | Comparing a company's costs with those of similar companies, or with models of efficient costs, to test whether its plans are efficient. |
| Top-down assessment | Testing total spending against high-level benchmarks or econometric models of efficient cost. |
| Bottom-up assessment | Testing individual projects and unit costs line by line, often with engineering review. |
| RIIO-ED2 | Ofgem's price control for electricity distribution networks in Great Britain, running from 2023 to 2028. |
| PR24 | Ofwat's 2024 price review, which set water and wastewater price limits in England and Wales for 2025 to 2030. |
It suits anyone who reviews business plans or designs capex allowances.
Price Controls 140 follows the courses on building blocks and the cost of capital, and leads into the course on incentive mechanisms.
Browse every title on the MCC Economics courses page.
MCC Economics advises regulators, government bodies and utilities on price controls in the United Kingdom and the Gulf, and has contributed to Ofwat's 2024 price review. The firm was founded in London in 2017. Its regulatory economics work covers energy, water, aviation and infrastructure. You can read the team's background on the people page.
MCC Economics has helped us better understand the most important issues for our stakeholders, including: charges, shareholder returns, debt payments and inflation impacts.
See the instructor profiles near the top of this page for the current teaching team and their experience.
No. Price Controls 140 is recorded course material only, so there is no meeting to attend. You get access to the materials when you register.
A lecture video, detailed slides, a transcript and a quiz to reinforce your learning.
Ofgem's RIIO-ED2 price control for electricity distribution, Ofwat's 2024 price review for water (PR24), and regulatory models used by members of the Energy Regulators Regional Association.
Yes. Regulators in training are part of the intended audience, particularly those working in member countries of the Energy Regulators Regional Association, the Middle East and North Africa, and the Commonwealth of Independent States.
It is not required, but Price Controls 120: Building Blocks explains the Regulatory Asset Base that capital spending feeds into.
Contact MCC Economics through the consultation page to discuss access for a team or training tailored to your organisation.
Page last reviewed October 2026.
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