Economic Consultancy on RCV Indexation and Real Term Price Effects for Water Regulation
Awarded 07 Dec 2015
About
The Water Services Regulation Authority awarded a contract to Oxera for economic consultancy to provide supporting evidence on whether to move away from RPI to an alternative form of indexation for the RCV and revenue controls for future price control periods.
The work assessed quantitative benefits and costs, including arguments for CPI such as lower long-term risk, closer correlation with underlying costs, and reduced financeability mismatch, as well as drawbacks like potential bill increases, higher costs of CPI-linked debt, and estimation errors.
The contract value was £95,000.
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