RPI-X@20: Output measures in the future regulatory framework

A report prepared for Ofgem

This report considers the use of outputs, rather than inputs, in the regulatory framework. Frontier concludes that output-based incentive regulation is preferable to input based regulation. However, because the regulatory challenge is now more complex, a pure output based regime is probably unattainable. This means that the regulator is likely to have to play a more interventionist role than it has in the past, but the limits to that intervention should be clearly prescribed in order to avoid the risk of the entire regime slipping into inefficient, input based regulation.

Frontier report - Outputs final report.pdf

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