In calculating a regulated business's costs for the purpose of setting prices we generally include an allowance for a return on capital. This requires us to estimate a weighted average cost of capital (WACC). We have reviewed the debt margin, one of the input parameters of our WACC calculation. This review has developed our approach to estimating the debt margin, focusing on 3 elements: 1.the pricing indicator or data source we use to obtain a sample of values for the debt margin 2.the statistical approach we use to set a point estimate or range of appropriate values for the debt margin from within this sample, and 3.the term to maturity we assume in setting the debt margin and other WACC parameters.