The limits on water prices are set every 5 years in England and Wales by the regulator Ofwat.
The regulator follows a predefined “Periodic Review” process involving the companies, the other quality regulators (EA, DWI, Natural England) the Consumer Council for Water, representing customers, Defra and the Welsh Assembly Government. Customers’ views are also explicitly taken into account through individual company research and through more national research carried out by Ofwat and CCWater with involvement from the other regulators and Water UK.
The following paper sets out the current Water Regulatroy Framework in England and Wales.