Economic regulation

Supporting regulated utilities in setting, and challenging, price controls

For regulated companies that are subject to price controls, there is an ongoing cycle of business plan development, price setting by the regulator and, where there is an unbreachable gap between the two in their expectations and outcomes, challenges of the regulatory determinations to the Competition and Markets Authority (CMA).

I support clients throughout all stages of this cycle.  Adopting good disciplines during the business planning phase with regards to the development of support evidence, and subjecting plans to effective challenge, can enhance the chances of a good outcome during the main regulatory process, as well as safeguarding the position for any eventual challenge.

Taking the decision to seek a redetermination is a significant step as the CMA process is a uniquely intensive experience.  It is necessary to produce substantial written submissions, deal with data requests with tight turnarounds and participate in high pressure hearings with big stakes. To be successful it is essential that you have a team that can manage those requirements, produce convincing materials that will win the hearts and minds of the CMA, and produce those results repeatedly throughout a demanding 6-12 month process.

Having been through multiple price control challenges in different sectors, I understand the importance of establishing a collaborative, supportive, efficient and effective team that brings together the experience of the company alongside external economics, engineering and legal expertise.

  • Price controls and business plans
  • Price controls and CMA challenges
  • Interim determinations

How can I support you?

Price controls and business plans: I have advised on various issues regarding price reviews, including assisting various water companies during the 2009, 2014 and 2019 price review processes with regard to business plans, responding to draft and final determinations, discussions with Ofwat and preparing for potential referrals to the CMA.

Price controls and CMA challenges: I have advised on multiple price control challenges to the CMA.  These are intensive processes that typically last between 6-12 months.  My role in these processes includes: supporting regulatory teams and company Boards in taking the decision whether or not to challenge; advising on the strategy for the redetermination process; drafting and delivery of the key written submissions; preparation for and support at hearings; coordination between the internal team and external legal, economic and engineering advisors; and acting as the day-to-day point of contact with the CMA.  Past instructions include:

  • advising Bristol Water on the redetermination of its PR09 price control for the provision of water services by the Competition Commission;
  • advising Bristol Water on the redetermination of its PR14 price control for the provision of water services by the CMA;
  • advising NATs (En-Route) Limited, the national provider of air traffic control services in the UK, on the CMA’s redetermination of its 2020-2024 price controls; and
  • advising Northumbrian Water on the redetermination of its PR19 price control for the provision of water and wastewater services by the CMA.

Interim determinations:  I have advised several water companies in connection with potential requests to Ofwat for interim determinations of price in accordance with the licence conditions and the WIA 1991.

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