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Embedding broader values in the regulatory model: An analysis of Ofgem's consumer value proposition for the natural gas distribution sector

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  • Poulter, Helen
  • Bolton, Ronan

Abstract

Customer engagement processes introduced in energy network regulation in Britain have incentivised networks to think beyond economic efficiency. To this end, the regulator introduced a new incentive: the Consumer Value Proposition (CVP), allowing companies to use a monetised metric to gain a financial reward should their investments show additional social and environmental value for customers. Through a case study of the RIIO2 natural gas distribution price-control process, we construct a narrative history of the design and assessment of the CVP initiative. We discuss the challenges of implementing such an approach in practice and embedding it in the regulatory model.

Suggested Citation

  • Poulter, Helen & Bolton, Ronan, 2023. "Embedding broader values in the regulatory model: An analysis of Ofgem's consumer value proposition for the natural gas distribution sector," Utilities Policy, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:juipol:v:80:y:2023:i:c:s0957178722001345
    DOI: 10.1016/j.jup.2022.101470
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    References listed on IDEAS

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    1. Yates, Brian T. & Marra, Mita, 2017. "Social Return On Investment (SROI): Problems, solutions … and is SROI a good investment?," Evaluation and Program Planning, Elsevier, vol. 64(C), pages 136-144.
    2. Ben-Akiva, Moshe & McFadden, Daniel & Train, Kenneth, 2019. "Foundations of Stated Preference Elicitation: Consumer Behavior and Choice-based Conjoint Analysis," Foundations and Trends(R) in Econometrics, now publishers, vol. 10(1-2), pages 1-144, January.
    3. Cave, Martin & Wright, Janet, 2021. "How can the concept of public value influence U.K. utility regulation?," Utilities Policy, Elsevier, vol. 72(C).
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