This paper sets out how we constructed a counterfactual to establish how much water customers in England and Wales could have benefited from an alternative charging system between 2010/11 and 2014/15.
Jump to downloadsWater companies currently receive an allowance for their cost of debt based on an interest rate which is fixed by the regulator for 5 years. This note explains how we modelled a counterfactual scenario for the period 2010-11 to 2014-15 in which the interest rate used to calculate the cost of debt allowance tracks the interest rate at which similar companies can borrow.
