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The last mile of the gas system — the local network that takes gas from the transmission grid at a city gate 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 gas flows — but with a long-run question over its future. Pick a real network below and follow it through the town, the 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 how much gas flows.
A gas distribution network is a local natural monopoly, so it doesn't charge a market price — a regulator sets its allowed revenue (recovered through distribution 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. The revenue is decoupled from how much gas flows — and the RAB grows with mains-replacement and connection capex. The twist unique to gas is the terminal value: whether the network decarbonises (hydrogen) or declines as heating electrifies.
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See also the standalone gas distribution (RAB) simulation and the Cash-flow & DCF model.