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
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:
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.