Where necessary improvements are sought. The Environment Act 1995 placed a duty on the companies to promote the efficient use of water by their customers. This duty is enforced by the Director. The Director must give companies incentives to reduce operating costs and the cost of maintaing their assets, raise money cheaply, and complete environmental projects at low cost. Where companies are successful in doing that, savings are passed on to customers at the next price review in the form of lower prices.
Price limits are a package.
Subject to meeting the regulator's requirements the companies make their own management decisions. The Director has a duty to facilitate competition between suppliers and potential suppliers, ensuring that a framework exists in which competition can develop. He should also have regard to the preservation of public amenities, such as freedom of access to the countryside and seaside, so far as they are consistent with his primary duties. Limiting charges The Director sets price caps which allow the companies to finance their functions. This gives companies incentives to make efficiencies.