Price-cap regulation

Price-cap regulation,

Definition of Price-cap regulation:

  1. After the rising costs of inputs (inflation) and the prices charged by competitors are considered, the price-cap regulation is introduced to protect the consumers, while ensuring that the business can remain profitable.

  2. A form of regulation that sets upper limits on utilities prices. The regulation originated in the United Kingdom in the 1980s, and was applied to privatized network utilities. The regulation takes into account such factors as the consumer price index, overall rate of inflation, and industry averages for operating efficiencies.

  3. A price-cap regulation is a form of economic regulation generally specific to the utility industry in the United Kingdom. Price-cap regulations set a cap on the price that the utility provider can charge. The cap is set according to several economic factors, such as the price cap index, expected efficiency savings and inflation.

How to use Price-cap regulation in a sentence?

  1. Price cap regulations set a cap on the price that a utility provider can charge.
  2. Price cap regulations force utilities to become more efficient in their operations but they can also result in less expenditures to maintain or upgrade their levels of service.
  3. The cap is set based on a slew of factors, from production inputs to efficiency savings and inflation.

Meaning of Price-cap regulation & Price-cap regulation Definition