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Water price regulation – Lessons learned from the UK

Water price regulation – Lessons learned from the UK

Water price regulation is transforming from frameworks that focus on incentivising cost efficiency and efficient pricing structures, to better engagement with customers about their values and priorities, and using financial and reputational incentives to improve performance

Tim White

Director, Utilities Policy & Regulation

KPMG Australia


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Illustration of tap with world globe in water droplet

This has meant moving away from frameworks where network businesses and regulators argue over what is best for customers, to asking customers what they want, and then developing plans to meet their needs.

Cost efficiency is still in focus. Customers want affordability and better value for money, therefore it remains front and centre. But customers expect more than just affordable water services. They want:

  • a better experience when they require customer support
  • more of what they value and less of what they don’t
  • a company that understands their challenges and supports them when they need it
    someone that contributes positively to the community and environmental sustainability
  • a service provider that they can trust to do the right thing by them.

The following paper considers recent changes to the UK’s water price regulation arrangements, and hypothesises on how this precedent might influence local regulatory arrangements.

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KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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