Ofwat's future approach to price controls (MD219)

Ofwat statement (62 pages, PDF) providing a response to consultations on the length of price control periods (January 2006) (responses), sustainable development (February 2006) (responses), and the process for assessing capital maintenance requirements (March 2006) (responses). The document also includes brief comments on the Financing Networks consultation (February 2006).

There is no mention of the potential role or effect of the development of market competition.

A statement on policy impact assessment is promised for early 2007. A "strategic exploration of the implications for value over the long term of our incentive mechanisms" (including rolling incentive allowances) is promised as part of the preparation for the 2009 review. No fundamental change to the process for assessing capital maintenance requirements appears to be under consideration, although a review of econometric models is promised by summer 2007.

For further information or advice please contact Franck Latrémolière.

Filed under Ofwat, Price controls, Water.

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