The cost of capital is the financial return investors require from an investment.
The input methodologies (IMs) require us to determine estimates of the cost of capital for regulated suppliers, which we then use in setting revenue limits for price-quality regulation and assessing profitability under information disclosure regulation.
We publish estimates of the cost of capital at regular intervals for each type of regulated service, as the different regulated services are subject to different risk profiles.
Estimates of the cost of capital for information disclosure purposes are determined annually. Estimates of the cost of capital for price-quality regulation (gas pipelines and electricity lines) are used in setting prices so they are determined before each new regulatory period.
On this page you can find:
determinations of the cost of capital made in accordance with the IMs determinations
guidelines for cost of capital determinations under the IMs.
Older cost of capital determinations can be found on the documents page.