Price caps stimulate the efficiency of the utility by actually allowing it to earn higher returns . All these mechanisms have different ways utility efficiency is stimulated . Price caps allow pricing flexibility and this would be a transition mechanism to stay competitive . The price index , productivity factors , and limits on the rates would have to be picked out . Lastly , the market-based pricing is based on setting rates on market determined prices . The rates would be in a way negotiated . There would...











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