Published 21st September, 2022

The primary focus of the draft guidance is on the common parameters for the cost of equity and the overall framework for choosing a point estimate for the allowed return on equity, due to these areas having the greatest commonality across regulators.

The 9 proposed recommendations in the draft guidance document bring together and consolidate existing methodologies, recognising the importance of both consistency across sectors as well as across time and recognises the benefits brought about by aligning regulatory approaches to investors and customers.

Specifically this consultation is seeking views on the following questions, raised on the draft guidance document;

Question 1)   Do you agree with the proposed recommendations?  

Question 2)   Do you have views on how this guidance could evolve over time, including views on potential issues for further investigation?  

We see consultation as an opportunity to seek views and participation on matters that affect the industry, the public and other interested parties.  We welcome views on the draft guidance document and the two presented questions by email; .  

Supporting Document: UKRN Consultation Process

Supporting Document: UKRN Consultation FAQ

UKRN guidance for regulators on the methodology for setting the cost of capital – consultation download below: