Price Controls 160 · On-demand course
A recorded course from MCC Economics on how regulators use financial, output-based and risk-sharing incentives to align company behaviour with public policy, with case studies from the RIIO model in Great Britain and Ireland's Commission for Regulation of Utilities.
Price Controls 160 is delivered by practitioners who design and assess incentive schemes 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 160 is a recorded course on incentive mechanisms in economic regulation. It explains what incentives are and why regulators use them, then covers tools such as totex sharing, outcome delivery incentives, C-MeX and menu regulation, using the RIIO model in Great Britain and Ireland's Commission for Regulation of Utilities as case studies.
You will be able to explain how an incentive scheme works and judge whether it is well designed. The course is built around three outcomes.
The lecture explains what incentive mechanisms are and why regulators use them, then works through the main tools.
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 |
|---|---|
| Incentive mechanism | A rule in a price control that rewards or penalises a company financially depending on its costs or performance. |
| Totex | Total expenditure: capital and operating spending treated together, so companies are not biased towards one or the other. |
| Totex sharing | Splitting any overspend or underspend against the allowance between the company and its customers at a set rate. |
| Outcome delivery incentives | Rewards and penalties linked to performance commitments, such as leakage or supply interruptions, used by Ofwat. |
| C-MeX | Ofwat's customer measure of experience, which rewards or penalises water companies for the service customers receive. |
| Menu regulation | Letting a company choose from a menu of allowances and sharing rates, designed so that accurate forecasts pay best. |
| Information asymmetry | The gap between what a company knows about its own costs and what the regulator knows. |
| RIIO | Ofgem's framework for energy networks in Great Britain: Revenue equals Incentives plus Innovation plus Outputs. |
| Commission for Regulation of Utilities | Ireland's independent regulator for energy and water. |
It suits anyone who designs, operates under or studies performance-based regulation.
Price Controls 160 builds on the courses about cost allowances and the cost of capital, and leads into the case studies from Oman.
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 160 is recorded course material only, so there is no meeting to attend. You get access to the materials once you register.
A lecture video, annotated slides, a transcript and a quiz to test your understanding.
Financial, output-based and risk-sharing incentives, including total expenditure (totex) sharing, outcome delivery incentives, Ofwat's customer measure of experience (C-MeX) and menu regulation.
The RIIO model used in Great Britain and the approach of Ireland's Commission for Regulation of Utilities.
It is not required, but Price Controls 140 and Price Controls 150 explain the capital and operating cost allowances that many incentives are built around.
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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