| Abstract: | The regulatory framework of the German water sector is currently undergoing a reorientation process at both the EU and national levels. Price regulation of water utilities is particularly controversial. Recently, some national antitrust authorities have significantly increased their oversight of abusive practices. However, the focus of the regulation in this field is exclusively on efficiency while neglecting other pricing objectives (e.g. internalisation of environmental costs). The article examines the current practice of different price regulation schemes (cost plus pricing and control of abusive practice) and identifies its shortcomings. It is shown that different regulating principles of relevant laws (law of charges, competition law and water law) have to be better aligned and sustainability issues need to be taken into account in theory and practice when addressing efficiency requirements for water utilities. |
