Water: Water competition
Competition is alive and kicking in the water sector. Various jurisdictions have been investigating or looking to introduce new forms of competition to the water and wastewater sectors.
In England and Scotland, non-domestic customers are able to switch their water supplier. In England and Wales, Ofwat has been investigating ways to introduce competition into upstream components of the water and wastewater value chain. Ofwat has also been introducing new contestable delivery routes for infrastructure as part of forthcoming price controls (Direct Procurement for Customers – DPC – involving competition for the market) that builds on the experience of the Thames Tideway Tunnel competition and other infrastructure competitive tendering models.
CEPA has extensive experience in providing advice on competition issues in the water sector:
- we were actively involved in the development of the regulatory framework for retail market competition in England;
- we have evaluated approaches to access pricing in the water sector in light of reforms to make the sector more competitive; and
- we have advised regulators and investors on new contestable regimes for network infrastructure.
See also CEPA’s experience on retail issues in the water sector.
Competition is alive and kicking in the water sector. Various jurisdictions have...
Water infrastructure investment
Infrastructure investment is vital in capital intensive industries like the water sector.
We advise regulators, industry organisations and water and sewage companies to ensure...
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Water News & insights
Utility Regulator publishes approach papers for its price control
The Utility Regulator in preparation for its price control (PC21), has published its PC21 Opex ‘minded to’ Methodology and PC21 Capex 'minded to' Methodology.
Econometric benchmarking for Ofwat
CEPA was commissioned by Ofwat to develop a suite of econometric models focusing on different parts of the value chain in order to determine the efficient level of costs allowed for companies under each of the binding price control settlements for PR19.
Approach to customer segmentation in the water sector
CEPA was engaged by Ofwat to build an evidence base on approaches to customer segmentation and possible data sources to inform approaches to residential customer segmentation.
Evaluating the social and economic impact of investments in wastewater
CEPA conducted a literature review of methodological approaches to evaluate economic and social impact of investments in the wastewater sector.
Review of readiness for retail market opening
CEPA was appointed by Ofwat to carry out a targeted review of market participants’ readiness for opening of the retail market in April 2017 for...
Alternative approaches for setting the cost of debt
CEPA were commissioned by two UK economic regulators to look at alternative approaches that could be used in regulatory determinations for the cost of debt allowance.
Estimating a shadow value of water
CEPA were appointed by the EBRD to support them in developing estimates of an economic value of water, reflecting the full social costs of water...
Thames Tideway Tunnel & the cost of capital
In 2015, Ofwat awarded the licence for the Thames Tideway Tunnel. As part of the announcement, Ofwat stated the cost of capital that will apply during the construction period of the project (the 'bid WACC') would be 2.497%.
Financial and economic analysis of Morocco’s water leakage reduction objective
CEPA was hired by the World Bank to review Morocco's submission to the United Nations Framework Convention on Climate Change.
Merger support in the water sector
CEPA supported Ofwat in the CMA inquiry into the merger of South West Water and Bournemouth Water.