RPI-X, competition as a rivalrous discovery process, and customer engagement - Paper presented at the Conference The British Utility Regulation Model: Beyond Competition and Incentive Regulation?

This paper considers the continued relevance of competition for utility regulation, especially in the context of Britain. It does so in three steps. First, it considers the context in which RPI-X entered the policy debate and became a central aspect of subsequent utility reforms. Second, it considers the contemporary context of British utility regulation. Third, this paper points to some significant new departures in British utility regulation that might allow for an extension of the emphasis placed on 'discovery' in the initial 1983 report, namely growing emphasis on negotiated settlements and customer engagement. The paper assesses some recent experiences, with a specific emphasis on water regulation in Scotland. The paper concludes by suggesting the scope for competition in designing and setting price controls.