Forms of water price control and model peer review

This report, commissioned by Ofwat (the regulator of water and sewerage companies in England and Wales), sets out background to the current regulation of water in England and Wales, the objectives and criteria of Ofwat in selecting a form of price control to apply on the 23 regional water companies, and the alternative forms available to it (including price caps, revenue caps, and revenue corrected caps correcting for over- or under- recovery during previous periods). In this report we critically discuss the criteria and options, and consider these against price control approaches adopted in other countries and sectors, in particular in the regulation of gas and electricty services. DotEcon’s main report can be downloaded here.

The project also required undertaking a short peer review of Ofwat’s own price control models quantifying the effects of the various options. DotEcon’s short peer review report can be downloaded here.

Both reports can also be downloaded from the Ofwat website.

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