Price Controls 170 · On-demand course
A recorded course from MCC Economics on the total expenditure (totex) approach, which brings capital and operating spending into one framework. It explains fast and slow money under RIIO and draws on examples from the United Kingdom, Belgium, Portugal and New Zealand.
Price Controls 170 is delivered by practitioners who model costs and 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 170 is a recorded course on totex regulation, where capital and operating spending are allowed together as one total. It explains why separate treatment creates a bias towards capital spending, how totex is split into fast and slow money under RIIO, and how it affects cost recovery, risk sharing and incentives, with examples from four countries.
You will be able to explain how a totex price control works and why regulators adopt it. The course is built around three outcomes.
The lecture defines totex, shows the problems it is designed to solve and then explains how it works in practice.
These are the terms the course uses most, in plain English. Ofgem is the Office of Gas and Electricity Markets.
| Term | Meaning |
|---|---|
| Totex | Total expenditure: capital and operating spending assessed and allowed together as a single figure. |
| Capex bias | The tendency to favour capital spending over operating solutions when capital earns a return on the asset base and operating costs do not. |
| Fast money | The share of totex recovered from customers in the year it is spent. |
| Slow money | The share of totex added to the asset base and recovered over many years through depreciation and a return. |
| Capitalisation rate | The set percentage that decides how much of totex is treated as slow money. |
| Totex sharing | Splitting any overspend or underspend against the totex allowance between the company and its customers at a set rate. |
| RIIO | Ofgem's framework for energy networks in Great Britain: Revenue equals Incentives plus Innovation plus Outputs. |
It suits anyone who designs, evaluates or works within cost frameworks for regulated networks.
Price Controls 170 brings together the courses on capital spending, operating costs and incentives.
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 170 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 short quiz.
Under a totex approach such as Ofgem's RIIO, total spending is split at a set rate. Fast money is recovered from customers in the year it is spent; slow money is added to the asset base and recovered over many years.
The United Kingdom, Belgium, Portugal and New Zealand.
It is not required, but Price Controls 140 and Price Controls 150 cover capital and operating costs separately, which helps show what totex changes.
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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