Originally published in January 2008. 2015 commentary by Oxera
Menu regulation is an innovative system in which companies are presented with a choice of regulatory contracts. Within its current methodology consultation, Ofwat, the England & Wales water regulator, is considering the introduction of menu regulation in the sector, meaning that there will be three sectors in the UK in which it will be applied: water, gas distribution and electricity distribution. What are the challenges of this new regulatory approach?