Regulating quality in public utilities
Price regulation was introduced for certain utilities because they are “natural monopolies”, whose behaviour is not constrained by market competition. But price is not the only factor that interests consumers. The need to set appropriate quality standards raises an even more complex set of issues, with which company regulators continue to wrestle. Recently, Frontier analysed some of these issues for the National Audit Office. This bulletin highlights some of the recent thinking on quality regulation.