Developing the water abstraction regime

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Client UK Water Industry Research (UKWIR)
Dates 2012
Service(s)Policy & Economics, Regulation & Competition

Following the UK Government’s intention to reform the water abstraction regime, CEPA, working in consortium with Mott MacDonald, were commissioned by UKWIR, the UK water industry research body, to develop and evaluate options for the Abstraction Incentive Mechanism (AIM). Ofwat had already published its initial views on an AIM in its August 2012 consultation and the output from this project was aimed at defining a preferred regime that could be used in the next price control review.

This project analysed five key issues:

  • identifying and understanding the problem requiring regulatory intervention;
  • appropriate criteria upon which to evaluate potential options;
  • the creation of relevant and practicable options;
  • assessment of these options; and
  • detailed definition of the preferred option.

As part of this project, we undertook a wide range of consultations with relevant stakeholders including water companies, regulators (i.e. Ofwat and the Environment Agency) as well as consumer representatives and environmental experts. The team was also responsible for delivering a workshop to stakeholders following an initial assessment and the selection of a preferred option.  This fed into Ofwat’s autumn 2012 Methodology consultations for PR14. The report can be found here.