INTERACTION OF REGULATION AND COMPETITION IN THE DEVELOPING UK GAS MARKET

The emphasis of regulation in UK utilities has moved from controlling final markets to encouraging competition by regulating the price which competitors pay for access to the (monopoly) network. Much attention has been paid to the optimal level of that access price, and the appropriate institutional instruments to achieve it. This paper examines one industry, gas, and shows how the monopoly incumbent has changed both the level and structure of its access price in response to changes in its regulatory and competitive environment.