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Question 3 (25 marks) Suppose that the Government has introduced economic regulation for an electricity distribution network. The regulator has reviewed different models of regulation
Question 3 (25 marks) Suppose that the Government has introduced economic regulation for an electricity distribution network. The regulator has reviewed different models of regulation and, following an extensive consultation process, has decided to introduce an RPI - X price cap. It proposes to set allowed revenues based on the revenue 'building block' formula (depreciation + return on capital + OPEX or TOTEX). The next step in the process is for the regulator to publish its
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