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Gibson, Colm; McKean, Cameron; Piffaut, Henri --- "Regulation of Water and Wastewater" [2012] ELECD 442; in Van den Bergh, J. Roger; Pacces, M. Alessio (eds), "Regulation and Economics" (Edward Elgar Publishing, 2012)

Book Title: Regulation and Economics

Editor(s): Van den Bergh, J. Roger; Pacces, M. Alessio

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847203434

Section: Chapter 10

Section Title: Regulation of Water and Wastewater

Author(s): Gibson, Colm; McKean, Cameron; Piffaut, Henri

Number of pages: 48

Extract:

10 Regulation of water and wastewater
Colm Gibson, Cameron McKean and Henri
Piffaut



1. INTRODUCTION

In this chapter we review the regulatory and economic framework of water
utilities. First (in Section 2) we provide a general introduction and an
overview of the industry, its economics and its legal/regulatory framework,
focusing, in particular on the United Kingdom (UK). We then appraise the
public policy framework for the economic regulation of the industry (in
Section 3), and consider the economic principles and methods for regulation
of the water industry (in Section 4). We then illustrate this by providing
insights into the practical application of price regulation within the UK
following privatisation (Section 5). Finally, we consider some of the emerg-
ing economic and regulatory issues facing the industry, including competi-
tion, the potential to establish a national grid for water and smart metering
of water (Section 6).


2. OVERVIEW

2.1 Introduction

This section provides a guide to the main operational aspects of the water
industry in general, and the key aspects of the industry within the UK in partic-
ular. First, we define the scope of the industry's services, before investigating
the components of the value chain. Other factors crucial to the industry, but
not addressed specifically in value chain analysis ­ the need for capital invest-
ment, and to fulfil wider environmental obligations ­ are discussed. We then
describe the ownership structure of water companies within the UK and the
regulatory bodies that govern them.




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