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Negotiated Settlements and Customer Engagement in UK Utility Regulation: Evidence from Airports, Water and Energy

Author

Listed:
  • Littlechild, S. C.
  • Bush, H.
  • Sutherland, A. D. A.
  • Knott, G.
  • Walker, A.

Abstract

Negotiated settlement has long been common in North American utility regulation but has played only a limited role in the United Kingdom. This paper looks at what can be learned from UK experience in airports, the Scottish water sector and energy networks, drawing in particular on presentations at a Cambridge seminar in March 2026. Airports show that direct bargaining can improve issue definition and customer focus even without full agreement. The Scottish water sector remains the clearest UK example of a near-negotiated settlement affecting the substance of the outcome. Energy networks have moved much further towards organised customer engagement than towards bargaining. The paper suggests that negotiated settlement deserves more serious attention in UK energy regulation where the issues are material, the parties are credible and the regulator can give the process real standing.

Suggested Citation

  • Littlechild, S. C. & Bush, H. & Sutherland, A. D. A. & Knott, G. & Walker, A., 2026. "Negotiated Settlements and Customer Engagement in UK Utility Regulation: Evidence from Airports, Water and Energy," Cambridge Working Papers in Economics 2669, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2669
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    References listed on IDEAS

    as
    1. Doucet, Joseph & Littlechild, Stephen, 2006. "Negotiated settlements: The development of legal and economic thinking," Utilities Policy, Elsevier, vol. 14(4), pages 266-277, December.
    2. Joseph Doucet & Stephen Littlechild, 2006. "Negotiated Settlements: The development of economic and legal thinking," Working Papers EPRG 0604, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    3. Bruce Mountain, 2026. "Bargaining under monopoly: negotiated settlement, customer bargaining and Australian energy networks," Working Papers EPRG2615, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    4. Littlechild, Stephen, 2014. "The Customer Forum: Customer engagement in the Scottish water sector," Utilities Policy, Elsevier, vol. 31(C), pages 206-218.
    5. Robert Hahn & Robert Metcalfe & Florian Rundhammer, 2020. "Promoting customer engagement: A new trend in utility regulation," Regulation & Governance, John Wiley & Sons, vol. 14(1), pages 121-149, January.
    6. Doucet, Joseph & Littlechild, Stephen, 2009. "Negotiated settlements and the National Energy Board in Canada," Energy Policy, Elsevier, vol. 37(11), pages 4633-4644, November.
    7. Daniel Duma & Michael G. Pollitt & Andrei Covatariu, 2024. "Regulatory Learning in the Face of Net Zero Climate Policy: The Case of the UK," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(2), pages 505-530, September.
    8. Heims, Eva M. & Lodge, Martin, 2018. "Customer engagement in UK water regulation: towards a collaborative regulatory state?," LSE Research Online Documents on Economics 87258, London School of Economics and Political Science, LSE Library.
    9. Littlechild, Stephen, 2012. "The process of negotiating settlements at FERC," Energy Policy, Elsevier, vol. 50(C), pages 174-191.
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    Keywords

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    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General

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