Utility Tariff Setting and Financial Modelling Training Course

Duration 5 days 10 modules · 33 contact hours
Level Intermediate Certificate on completion
Who attends Utility Finance Managers, Regulatory Affairs Managers and others
Fee from USD 1,100 KSh 95,000 for Kenyan organisations
Where 52 cities + online See dates by city
Next start 16 Nov 2026 Course code SD-FM-131

Before you join: Participants should be comfortable reading income statements, balance sheets and cash flow statements, and should understand basic budgeting, discounted cash flow concepts and spreadsheet formulas.

Dates & prices

Two start dates a month in every city, and live online on weekdays or weekends. Fees are per participant; classroom fees include tuition, materials, lunch and refreshments, and the certificate.

Suggest a date or city

Showing the next six months. Later dates, other cities and private deliveries for your team are available on request.

Course overview

Utility tariffs must recover efficient costs, fund investment, meet debt obligations and remain affordable for customers. Finance teams need to translate operating plans, capital programmes, demand forecasts and financing assumptions into a defensible revenue requirement and tariff proposal. Weak models can create under-recovery, liquidity pressure, regulatory challenge, avoidable cross-subsidies or tariff increases that cannot be clearly explained.

This course teaches the financial and regulatory logic behind utility tariff setting for electricity, water, wastewater, gas and similar regulated services. Participants build the link from customer demand and operating costs through the regulatory asset base, depreciation, tax, weighted average cost of capital, financing and tariff design. They examine cost-of-service regulation, price-cap approaches, pass-through mechanisms, true-ups, affordability analysis and the financial viability tests used by regulators and lenders.

Teaching combines focused briefings with utility rate-case scenarios, model-building tasks, group review of assumptions and tariff options, and facilitated simulations of regulatory challenge. Participants work with financial model structures that connect revenue requirement, tariff schedules, projected financial statements and covenant metrics. They leave with a reusable tariff model workbook structure, revenue requirement schedule, tariff design framework, model control checklist and a practical plan for improving their own tariff review process.

The course is designed for utility finance, regulatory, planning, commercial and investment professionals who contribute to tariff applications or internal business plans. It is also relevant to public-sector officials, regulators, lenders and advisers who review utility financial projections and proposed customer charges.

What you will be able to do

  • Calculate a utility revenue requirement using RAB, opex, depreciation, tax and WACC assumptions
  • Build driver-based demand, operating cost, capital expenditure and financing forecasts
  • Construct an integrated tariff model linking tariff charges to projected financial statements
  • Assess WACC, financeability and covenant metrics for regulated utility investment plans
  • Design customer tariff structures using cost allocation, affordability and efficiency principles
  • Apply price-cap, pass-through and true-up mechanisms within tariff review models
  • Test tariff proposals through scenario analysis, sensitivity tables and affordability indicators
  • Prepare a rate-case evidence pack with reconciled schedules and model audit trails

Benefits of attending

For you

  • Produce tariff proposals supported by transparent revenue requirement calculations
  • Challenge WACC, demand and cost assumptions with structured financial evidence
  • Explain tariff increases through clear links to assets, service and financing
  • Build more reliable utility forecast models with documented controls
  • Contribute credibly to regulatory reviews, lender discussions and investment planning

For your organisation

  • Improves tariff submissions through reconciled assumptions, schedules and evidence trails
  • Reduces under-recovery risk by linking charges to projected cash requirements
  • Supports financeable capital programmes through covenant and liquidity testing
  • Strengthens governance over tariff models, data sources and approval decisions
  • Improves customer and regulator communication on affordability and cost drivers

Course modules

10 modules over 5 days

Participants can explain how regulatory arrangements determine utility revenue recovery and tariff decisions.

  • Utility value chains, service obligations and regulatory compact economics
  • Cost-of-service regulation, price caps and hybrid tariff regimes
  • Revenue requirement architecture linking RAB, opex, depreciation and tax
  • Regulatory periods, control periods and tariff review calendars
  • Roles of regulator, ministry, utility, customers and lenders
  • Licence conditions and statutory duties shaping tariff submissions

Participants can develop demand and billing forecasts that provide reliable tariff model inputs.

  • Demand segmentation using customer class, voltage level and consumption profiles
  • Billing determinants: connections, kilowatt-hours, kVA demand and peak coincidence
  • Weather normalisation and demand forecasting assumptions for tariff projections
  • Loss-adjusted energy balances from generation purchase through billed sales
  • Non-revenue water calculations separating physical losses, commercial losses and consumption
  • Customer growth, elasticity and affordability drivers in demand scenarios

Participants can model RAB movements and capital expenditure treatment for regulatory recovery.

  • Opening RAB reconciliation from audited fixed-asset and regulatory records
  • Capitalisation policies distinguishing eligible additions, renewals and operating expenditure
  • Regulatory depreciation methods: straight-line, annuity and economic asset lives
  • Indexation mechanisms using CPI, foreign exchange and construction indices
  • Disposals, contributions and grants treated within RAB roll-forwards
  • Capital expenditure profiling linked to procurement milestones and commissioning dates

Participants can forecast efficient operating expenditure and document the assumptions supporting recovery.

  • Operating expenditure baselines built from general ledger cost centres
  • Efficient-cost benchmarks, frontier analysis and regulatory challenge evidence
  • Fixed, variable and step-cost behaviour in demand scenarios
  • Inflation escalation by labour, fuel, chemicals and contractor indices
  • Power purchase, bulk water and fuel cost pass-through mechanisms
  • Service-quality incentives linking operating plans, outages and customer standards

Participants can estimate regulatory WACC and assess whether proposed tariffs support financeability.

  • Capital structure assumptions using regulatory gearing and financing covenants
  • CAPM cost of equity: beta, risk-free rate and market premium
  • Cost of debt calculated from embedded debt and forward curves
  • Post-tax and pre-tax WACC conversions under stated tax assumptions
  • Country risk, currency risk and liquidity premia evidenced transparently
  • Financeability metrics: FFO interest cover, DSCR and retained cash flow

Participants can design tariff structures that recover required revenue while considering customer impacts.

  • Two-part tariffs combining fixed charges, energy charges and demand charges
  • Cost allocation using causation, coincident peak and customer-related drivers
  • Tariff design objectives: cost recovery, efficiency, equity and simplicity
  • Cross-subsidy measurement between customer classes and service territories
  • Block tariffs, lifeline allowances and increasing-block affordability structures
  • Time-of-use pricing aligned with system peaks and load profiles

Participants can structure a controlled spreadsheet model for tariff-setting decisions and reviews.

  • Workbook architecture separating inputs, calculations, outputs and control sheets
  • Driver-based forecasts connecting volumes, costs, assets, financing and tariffs
  • Excel named ranges, structured formulas and consistent sign conventions
  • Annual and monthly model timelines with controlled escalation formulas
  • Error checks for balance integrity, circularity and tariff recovery
  • Version control, assumption logs and model review protocols

Participants can connect tariff assumptions to projected financial statements, liquidity and debt service.

  • Integrated income statement, cash flow and balance sheet forecasts
  • Working capital schedules for receivables, payables, inventory and deposits
  • Debt drawdown, repayment and interest schedules linked to covenants
  • Tax modelling for deductible interest, losses and deferred tax
  • IFRIC 12 accounting considerations for service concession arrangements
  • Financial viability tested through liquidity, solvency and covenant metrics

Participants can test tariff resilience under regulatory mechanisms and adverse operating scenarios.

  • Price-cap formulae applying RPI-X, CPI-X and efficiency factors
  • Tariff adjustment clauses for fuel, exchange rates and purchased power
  • True-up mechanisms reconciling forecast and actual volumes, costs and revenues
  • Scenario analysis for drought, demand shocks, inflation and currency depreciation
  • One-way and two-way sensitivity tables for key tariff drivers
  • Affordability indicators using household expenditure shares and consumption baskets

Participants can prepare a well-governed tariff submission and plan its internal implementation.

  • Rate-case narrative connecting evidence, assumptions, calculations and requested tariffs
  • Regulatory submission schedules reconciling revenue requirement to proposed charges
  • Audit trail documentation for source data, judgements and model changes
  • Management dashboards showing tariffs, cash headroom, capex and service indicators
  • Stakeholder communications addressing affordability, service commitments and investor confidence
  • Personal application plan for model governance and tariff review deadlines

Exercises and examples are adapted to each cohort's sectors and roles.

What you take back to work

  1. Utility tariff model workbook structure
  2. Revenue requirement calculation template
  3. RAB roll-forward schedule
  4. WACC and financeability assessment template
  5. Tariff design and affordability analysis framework
  6. Tariff model governance checklist

Who should attend

  • Utility Finance Managers — need defensible forecasts for tariff applications and business plans
  • Regulatory Affairs Managers — translate regulatory rules into evidence-based tariff submissions
  • Financial Modellers — build controlled models linking operations, finance and customer charges
  • Commercial and Pricing Managers — design tariff structures that recover approved revenues
  • Capital Planning Managers — connect investment programmes to RAB growth and customer tariffs
  • Regulators, Lenders and Advisers — assess utility forecasts, tariff proposals and financial viability

Skills and tools covered

Revenue requirement modellingRegulatory asset baseTariff designWACC estimationFinanceability analysisModel governance

Tools and standards

Microsoft Excel, Capital Asset Pricing Model, IFRIC 12 Service Concession Arrangements, COSO Internal Control—Integrated Framework

How the course runs

Training methodology

The course uses short technical briefings followed by utility-focused case work and guided model construction. Participants analyse revenue requirement components, build forecast schedules, test tariff alternatives and review the effects of demand, inflation, exchange-rate and capital expenditure changes. Group exercises examine regulatory challenge points, affordability concerns and financing constraints. Simulations require participants to defend assumptions from the perspectives of utility management, customers, regulators and lenders. The final sessions convert course methods into an application plan for participants' tariff cycles and model governance arrangements.

Requirements and prerequisites

Participants should be comfortable reading income statements, balance sheets and cash flow statements, and should understand basic budgeting, discounted cash flow concepts and spreadsheet formulas. Experience in a utility, infrastructure business, regulator, public authority, lender or advisory role is helpful. Participants should bring familiarity with their own organisation's tariff rules, cost categories or investment plan where available. Prior utility regulation training, advanced corporate finance knowledge, programming skills and prior financial modelling certification are not required.

A typical training day

08:30 – 10:30First session
10:30 – 10:45Refreshment break
10:45 – 12:30Second session
12:30 – 13:30Lunch and networking
13:30 – 15:00Third session
15:00 – 15:15Refreshment break
15:15 – 16:30Workshop and daily review

Live online deliveries follow the same structure in East Africa Time, with shorter screen blocks and longer breaks.

What the fee includes

  • Instruction by a practitioner facilitator
  • Full course workbook and materials
  • Exercise files, templates and case studies
  • Refreshments and lunch on classroom deliveries
  • Certificate of completion
  • Post-course application plan

Frequently asked questions

You should be able to read core financial statements and work confidently with standard spreadsheet formulas. Previous experience with utility tariffs or regulatory finance is useful but not essential.

Bring a laptop with Microsoft Excel and, if permitted, a redacted copy of your tariff model, business plan or tariff rules. Course materials provide the data and templates needed for all classroom work.

It is intended for finance, regulatory, commercial, planning and investment professionals working with utilities or regulated infrastructure. Regulators, lenders, public authorities and advisers will also benefit from understanding how utility tariff proposals are constructed and assessed.

General modelling courses focus on spreadsheet construction and corporate finance models, while project finance courses focus on transaction-level debt structuring. This course concentrates on the regulatory revenue requirement, tariff design, RAB, cost recovery, affordability and utility financeability.

Participants can apply the model structure to tariff reviews, annual budgets, capital plans, financing plans and regulatory submissions. The control checklist and evidence-pack approach can also improve review and approval of existing tariff models.

Each training day runs from 08:30 to 16:30 and provides about 6.5 contact hours. The programme progresses from regulatory concepts and revenue requirements to model construction, tariff testing, submission documentation and implementation planning.

Questions about this course?

Ask about dates, fees, group bookings or running it for your team. Our training team replies by email.

Ask on WhatsApp info@skillsetdevelopment.com

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