Course

Utility Regulation Training Course

An in-depth course on the regulation of utilities and other markets with regulated infrastructure.

15 – 16 May 2019 | London

About this Course

Combining a solid theoretical foundation with interactive hands-on experience this long-running course has equipped dozens of senior executives, consultants and new starters alike with the skills they need to help their businesses prepare for price reviews and operate in regulated industries.

The Utility Regulation training course equips attendees with practical knowledge of the fundamental tenets of price controls, including sessions on assessing efficient costs, understanding the cost of capital and designing incentive schemes. Delivered by experts from Europe Economics, this course has been carefully designed to ensure attendees leave with a comprehensive understanding of the methods used by utilities regulators and the implications of their approaches. The syllabus is tailored to deliver a diverse range of sessions that will be relevant to all departments, including strategy, finance, regulation and compliance.

Why Attend?

This TWO-day course

Discover the methods used to calculate price controls

Gain practical insight into how the cost of capital is estimated

Discuss the issues in an interactive forum with like-minded peers from various sectors

Learn how regulators determine what costs to allow within price limits

Examine the role of incentive schemes and the different approaches

Very informative, good practical session and good size of people attending so right feel.

- Elexon

Most beneficial and definitely a great high level overview of utility regulation. Increased my understanding.

- Bord Gáis

Course Trainers

dermot-glynn

Dermot Glynn

Member, Competition Appeal Tribunal & Chairman, Europe Economics

Dermot Glynn is a member of the Competition Appeal Tribunal and a Senior Adviser at Europe Economics. He has overseen the successful execution of a wide range of projects for a variety of utility and other regulatory clients, both public and private sector. Earlier in his career, Dermot spent time as Managing Director of another economics consultancy, Chief Economist at the accountancy firm KPMG, and Economic Director at the Confederation of British Industry.

Stephen-Topping

Stephen Topping

Managing Consultant, Europe Economics

Stephen Topping is a Managing Consultant who has led many of Europe Economics’ utility regulation projects. He has over 18 years’ experience advising clients across a range of utility and transport sectors, including clients in the energy, water, airports, rail and telecoms sectors. He has advised on many aspects of utility regulation, including the design of regulatory frameworks, the cost of capital and cost assessment. He has worked on secondment within Ofwat, Ofgem, Ofcom and the (then) OFT. .

Andrew-Lilico

Dr Andrew Lilico

Director, Europe Economics

Dr Andrew Lilico is a Director of Europe Economics and is a leading finance expert. He has directed major projects on the cost of capital, competition, and impact assessment. He has lectured at UCL in Corporate Finance, Money and Banking, and Macroeconomics. He is a member of the IEA/Sunday Times Shadow Monetary Policy Committee, and is a frequent commentator on the BBC, Sky, Bloomberg and CNBC.

Who Attends

Course Agenda

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Day One Wednesday, 15 May 2019

Day Two Thursday, 16 May 2019

Introduction to course

10:00
  • Purpose and format of course
  • Welcome and introductions

Key principles of utility regulation

10:15
  • Why regulate utilities?
  • Role of independent regulators
  • Rate of return versus RPI-X regulation
  • Periodic reviews and appeal mechanisms

11:15

Refreshments

Building blocks of price controls

11:30
  • Operating expenditure (opex), capital expenditure (capex), regulatory asset value (RAV) / regulatory capital value (RCV), depreciation, and weighted average cost of capital (WACC)
  • Valuing the asset base
  • Depreciation policy and asset lives
  • How price controlled revenues are calculated from the building blocks
  • Profiling of revenue (P0 and X factor)

12:30

Lunch Break

Break-out session: building a simple financial model

13:30

In this session attendees will break out into smaller groups to practice building up price controlled revenues from the building blocks using Excel models. Doing the calculations with the illustrative data provided will help attendees to cement their understanding of how the process works.


Assessing efficient costs

14:30
  • Collecting information – regulatory accounts and business plan questionnaires
  • Assessing case for proposed capital expenditure
  • Bottom-up and top-down assessment of cost efficiency
  • Overview of econometric approaches (for non-specialist)
  • Catch-up and frontier shift

15:30

Refreshments

Break-out session: assessing efficient costs

15:45

Breaking into small groups, delegates will perform an interactive case study, with each group focusing on a different perspective. For example:

  • Company perspective – putting the case for opex and capex proposals
  • Regulator perspective – assessing what costs should be allowed
  • Customer perspective – advocacy on behalf of customers

 


Wrap-up from break-out session

17:00
  • Each break-out group to present back to overall group
  • Different perspectives compared / debated
  • Share and discuss the key lessons to take away from each break-out group

17:30

Close of Day One

Quick refresher session

09:30
  • Brief overview of what was covered on previous day
  • Introducing the key topics for Day Two

Cost of capital and financeability

09:45
  • Definition and role of cost of capital
  • Types of risk and the Capital Asset Pricing Model (CAPM)
  • Cost of equity: risk free rate, equity beta and equity risk premium
  • Cost of debt: risk free rate and debt premium
  • Gearing and taxes
  • Financeability

11:00

Refreshments

Break-out session: assessing the cost of capital

11:15

Breaking into small groups, delegates will be given an interactive case study involving tasks that consider different aspects of the WACC and financeability. Topics include:

  • Risk free rate
  • Equity beta
  • Equity risk premium
  • Debt premium
  • Gearing and financeability

Wrap-up from break-out session

12:15
  • Each break-out group to present back to overall group
  • Share and discuss the key lessons to take away from each break-out group

12:45

Lunch Break

Mechanisms for dealing with risk and uncertainty

13:45
  • Risks born by price regulated firms
  • Why use risk mitigants?
  • Adjustments requiring regulator input and automatic adjustments

Incentive schemes

14:15
  • Rolling opex and capex efficiency incentives
  • Incentives for quality of service
  • Incentives for submission of appropriate capex plan

Break-out session: incentives for quality of service

15:00

Breaking into small groups, delegates will be given an interactive case study with each group focusing on a specific perspective. For example:

  • Company perspective – seeking rewards and minimising financial exposure
  • Regulator perspective – balancing statutory duties
  • Customer perspective – taking account of customer preferences

16:00

Refreshments

Wrap-up from break-out session

16:15
  • Each break-out group to present back to overall group
  • Different perspectives compared / debated
  • Share and discuss the key lessons to take away from each break-out group

Course summary and conclusions

16:45
  • Brief summary of what has been learned during course
  • Final opportunity to ask questions

17:00

Close of Day Two

Register

Course includes:

All day access to trainers, coursework, lunch and refreshments

Group Discount

15% off

When you buy 3 or more tickets

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