Seeking Regulatory Remedies in Response to COVID-19
What Options Do Utilities Have?
The ongoing COVID-19 pandemic will have a cost and a revenue impact on every UK firm. Hope remains that the UK’s strong market-based economy will rebalance itself once the situation normalises, with prices adjusting to ensure that companies can survive and recover their financial health.
The situation for utility companies is complicated by their prices being constrained tightly by caps set by economic regulators, which can prevent them adjusting their prices to reflect unavoidable COVID-19 costs. Companies will need to consider employing one of several regulatory mechanisms to ensure that their income covers their COVID-19 costs. In this article, we will look at the available options.