tutor2u | Regulatory failure in the UK electricity industry

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Regulatory failure in the UK electricity industry

Graham Watson

30th January 2020

A case of regulator pitched against regulator, with the National Audit Office suggesting that lenient regulation of electricity network providers has seen consumers overpaying for their electricity.

This might be considered regulatory failure, and you might think that it also implies a degree of regulatory capture, where regulators side with producers rather than act in consumers' interests.

The problem has emerged as a result of the financial target set for investing in the network, with only one firm overspending and the majority underspending, boosting returns to investors at the expense of the customer. Expect the next round of financial target setting to be far more stringent. You might even consider what the role of these targets is...

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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