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The last mile of the power system — the local network that takes power from the grid and delivers it, street by street, to every home and business. A regulated monopoly that earns a return on its asset base, decoupled from how much power flows. Pick a real network below and follow it through the town, the regulatory model and a working returns model.
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Drag the sliders to see what earns the regulated revenue — the asset base and the allowed return, not the power flow.
A distribution network is a local natural monopoly, so it doesn't charge a market price — a regulator sets its allowed revenue (recovered through use-of-system charges). The building blocks are the same the world over: a return on the asset base (the RAB or rate base) at an allowed cost of capital; recovery of depreciation; an opex allowance; and incentives for reliability, connections and efficiency. The revenue is decoupled from how much power flows — and the RAB is inflation-protected and grows with every pound of capex as the network electrifies (EVs, heat pumps, rooftop solar).
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See also the RIIO-ED2 Revenue Calculator — build a DNO's allowed revenue from the regulatory building blocks — and the Cash-flow & DCF model.