Comparative Assessment of the Energy Costs Recovery in the Tariff Methodologies of the Water Sector across European CountriesUploaded: 11 of April, 2023

During 2021-2022 Europe has witnessed an unprecedented increase in the cost of energy supply, badly impacting most economic sectors, including water and sanitation utilities. WAREG, the European association of water utility regulatory authorities, has contracted the consortium of REKK and Optima EC to analyse how European water utilities are affected by and cope with the crisis, how regulatory authorities have responded and what are some of the related best practices and lessons from the last 2 years.

In support of the research we developed a detailed survey instrument, and used it collected data from European water utility regulators, with follow-up interviews with their representatives. The questionnaire and the interviews sought to understand the regulators’ tariff methodologies, the automatic adjustment to the energy costs, the possibility to trigger an extraordinary review, incentives for energy conservation under ‘business-as-usual’ setting. These were then compared with the measures that regulators undertook in response to the energy crisis. The resulting report presents some key findings and is structured as follows:

• Overview of the European energy crisis

• Energy management and energy costs of water service providers

• Tariff-setting practices among member regulators

• The impact of the energy crisis

• Insights into case studies about how the crisis is dealt with in particular jurisdictions, and

• Policy recommendations to be considered by member regulators as a result of the crisis.

The study is available at WAREG website.