Rising interest rates play havoc with UK regulator’s calculations

The cost of capital is the key issue in the price review process. It is becoming very difficult to predict.

The process of fixing the weighted average cost of capital (WACC) for the next price review period looks like being one of the biggest challenges for Ofwat Director General Philip Fletcher. The WACC is a key figure for the water companies as it determines the profit they are allowed to make. Mr Fletcher’s predecessor at Ofwat has been roundly ...

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