Cost of debt: Briefing 5 in CEPA's key questions for RIIO-GD2 and T2 series

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31st July 2017
Ofgem’s introduction of a trailing average cost of debt index was an improvement over its previous approach of setting a fixed cost of debt with built-in headroom by removing forecasting risk. But network companies have still been able to bolster their returns by outperforming the index. What Ofgem does next will be a test of its ability to evolve while maintaining regulatory stability.

Download CEPA's briefing: Cost of debt

By:
Ian Alexander
Ian Alexander, a director and regulatory economist with over 25 years’ experience of supporting regulators and companies in price control reviews. He has worked extensively in the UK energy sector on both traditional and innovative regulatory issues.

Nick Hodges
Nick Hodges, a senior consultant who has worked extensively on the financial aspects of utility regulation, including the cost of capital and financeability. He managed CEPA’s recent study into approaches to the cost of debt in the UK water and
aviation sectors.