Principles of Economic Regulation

This course serves as the cornerstone of the economic regulation training track. It provides a high level overview of the full programme while focusing on the principles of economic regulation, applied regulatory models, and the building block approach to revenue setting and revenue determinants. It also introduces key concepts of cost allocation, tariff structures, and tariff design.

This course is eligible for 5 CER credits. More information on the Certified Energy Regulator (CER).

In case of interest, please contact the ERRA Secretariat.

This course is Module 1 of Track B: Economic Regulation of the Energy Sector

1B1: Principles of Economic Regulation

This course serves as the cornerstone of the economic regulation training track. It provides a high level overview of the full programme while focusing on the principles of economic regulation, applied regulatory models, and the building block approach to revenue setting and revenue determinants. It also introduces key concepts of cost allocation, tariff structures, and tariff design. Duration: 4 days.

2B2: Capital Expenditure (CAPEX) Review and Assessment Tools

A focused course on capital expenditure review and assessment tools covering regulatory measures to review and approve the reasonableness of capex plans submitted by licensees. Topics include Regulatory Asset Base (RAB) valuation methods, integration of RAB in the Allowed Revenues of licensees, financial and economic tests applied to capex plans and efficiency analysis used in economic regulation. Duration: 2 days.

3B3: Financing Future Grid: Efficient WACC for Energy Transition

This focused course examines regulatory considerations in assessing the weighted average cost of capital for regulated infrastructure. It covers methodologies for assessing the cost of debt, appropriate gearing levels, and regulatory approaches to estimating the cost of equity, with particular emphasis on CAPM. Duration: 2 days.

4B4: Future-Proof End-Use Tariff and Retail Supply Regulation

Traditional tariff structures are increasingly unfit for modern power systems integrating high shares of renewables, electrifying end users, and accommodating distributed energy resources. This advanced course guides participants through the principles of modern tariff design - looking beyond cost recovery, cost reflectivity, and economic efficiency to address capacity based tariffs, dynamic tariffs, and alternative structures adequate for the grids of the future. Duration: 3 days.

February 2028

4 days

Introductory

5 CER credits

ERRA Academy

Student Testimonials

Mr. Guilherme Cordeiro, Coordinator of Access to Transportation Systems, ANP Brazil

98%

overall rating of the course

Participating in the Economic Regulation and Electricity Tariff Setting programme was a highly enriching and professionally valuable experience.
The course provided a rigorous yet practical exploration of core regulatory principles, revenue requirement methodologies, tariff design, and market mechanisms. What stood out most was the programme’s ability to bridge theory and practice. The discussions and case examples were directly relevant to the day-to-day responsibilities of regulatory professionals, particularly in the context of ongoing sector reform and energy transition. The opportunity to engage with peers from different jurisdictions also offered meaningful comparative insights and broadened my perspective on contemporary regulatory challenges.

I would strongly recommend this programme to regulators and energy sector professionals seeking to strengthen their technical foundation while engaging in forward-looking discussions on the future of electricity markets.

Ms. Kulani Mathumbu, Economic and Financial Analyst, National Energy Regulator of South Africa (NERSA)

ERRA Academy

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