Regulators – consumers’ friend?

I see consumer groups are squealing that even water companies [with no excuse from rising oil prices] are asking for above-inflation price rises. Why? – because they have humbly suggested that if people want water in future, they had better replace the ancient equipment before it fails completely.

Regulators, of course, have helped consumers enormously here, pressing down on water-compay prices and ROI, and grudgingly allowing them to invest in maintaining that equipment. One UK firm estimated that the capex they were allowed would enable them to replace their equiment once every 250 years. Thanks, regulators! I hope consumers in other countries are not so badly served.

BTW – if you want to read more about this issue, and see a way of understanding how to manage it, see chapter 6 of Strategic Management Dynamics and registered instructors and students can work with the model of this issue in the chapter’s online resources.

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