Utility Regulation : A Critical Path for Revising Price Controls
The United Kingdom has pioneered the use of price control regulation. The periodic review of these controls lies at the core of the mechanism, and the UK experience shows that this review is complex and time-consuming and can be controversial. Base...
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| Format: | Viewpoint |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1997/11/441721/utility-regulation-critical-path-revising-price-controls http://hdl.handle.net/10986/11566 |
| Summary: | The United Kingdom has pioneered the use
of price control regulation. The periodic review of these
controls lies at the core of the mechanism, and the UK
experience shows that this review is complex and
time-consuming and can be controversial. Based on the UK
experience the author proposes a sequence of tasks that
regulators in other countries could use when revising price
controls. He argues that regulators should start to reset
controls at least two years before new controls are due to
come into effect. Much information will be required, and it
will all have to be checked and processed before the
regulator can propose new controls. In addition, most
regulatory systems include an appeals mechanism to protect
companies against overly zealous regulators, so regulators
must make their proposals early enough to allow for a
possible appeal. These considerations imply that regulators
should make their proposals at least nine months before new
controls are due to take effect, to allow six months for an
appeal and time to implement the eventual decision. |
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