Danish Competition and Consumer Authority - KFST (Denmark)


Regulatory Model

The Danish Water Utility Regulatory Authority is responsible for the economic regulation of the water and wastewater companies in Denmark. The economic regulation covers the approximately 300 largest companies, that supply more than 200.000 m3 water, or are owned by the municipalities.
The water sector act was adopted in 2009, and the same year the minister for the Environment created the Water Utility Regulatory Authority.

The economic regulation in the water sector act covers:

  1. Comparison of the companies' efficiency (benchmarking).
  2. Determination of annual price caps on companies' prices.
  3. Supervision of water companies' internal monitoring system.
  4. Guidance of the companies in the rules and how companies must report mm.
  5. Contribute to the development of the regulation.

In addition the municipalities are reporting to the authority according to the Act on Municipalities sale of water and waste water companies. The authority is independent of instructions on the handling of individual cases. The authority is located in the Competition and Consumer Agency.
The costs associated with the operations and decision-making are paid by the water companies covered by the law. Each year, the agency releases its annual operational and financial report and submits it to the minister for the Environment.

Regulated sectors

The water sector encompasses 2.500 water companies of which 230 is covered by the water sector act and 100 wastewater companies, all covered by the water sector act.

Main responsibilities

The executive order of the Danish Water Utility Regulatory Authority: https://www.retsinformation.dk/Forms/R0710.aspx?id=128504

Tariff Setting

The Danish Water Utility Regulatory Authority sets annual price caps on each company. On the basis of the price caps the company sets tariffs for the following year. The tariffs must be approved by the municipality.

The Regulator

Year of establishment: 2009
Characteristics: Single-sector regulator, Independent National Regulatory Authority; Number of employees: 13 employees; Budget: 1,6 million Euros (2015).
Danish Competition and Consumer Authority
Carl Jacobsens Vej 35
2500 Valby
Phone: +45 41 71 50 00
Fax: +45 41 71 51 00
Mail: kfst@kfst.dk    Website: www.kfst.dk

Other relevant entities

The Nature Agency (www.nst.dk) under the Ministry for Environment is responsible for drinking water quality, and for the rules regarding which activities the companies can perform.
The Ministry of the Environment (www.mim.dk) is in charge of administrative and research tasks in the area of environmental protection and planning. In Denmark the administration at state level is managed by Ministry of the Environment. At regional and local level, much of the administrative responsibility has been delegated to municipalities.
The Ministry of Business and Growth (www.evm.dk) is responsible for a number of policy areas which are important for the general business environment, including business regulation, Intellectual Property Rights, competition and consumer policy, the financial sector and shipping.


Sector Description

The Danish water sector comprises a very large number of water companies covering over great diversity in terms of size, type of ownership and organization. The approximately 2.800 public water companies are spread over some 2.500 water companies and about 300 wastewater companies.
All the municipally owned water companies covered by water sector law , while a large part of the private water companies is below the threshold of 200,000 m3 of annual water production and are therefore not covered by the Water Sector Act.
Over recent years there has been an ongoing consolidation in the water sector. In 2003 there were 4.155 public entities in the water sector spread over 2.792 water companies and 1.363 waste water companies, while there are currently about 2.500 entities in total.

Legal and institutional framework

In the Water Sector Act's objects clause ( § 1 ) it appears that "The law should help to ensure a water and wastewater supply of high health and environmental quality, which takes into account forsy -ing safety and nature and operated in an efficient manner that is transparent to consumers."
In the text that formed the basis for the Water Sector Act, the following terms summarized as the main elements of the agreement:

Market Structure

The activities of water supply and wastewater management are mainly divided into two types of ownership: municipally owned water companies and private - and thus consumer owned - water companies. The extent of the different forms of ownership and boundaries in relation to water sector law are shown below.

Drinking Water Waste Water
Type of ownership Companies Share of water production Type of ownership Companies Share of water production
Municipality 87 Ca. 67 pct. Municipality 97 Approx. 98 pct.
Private regulated 135 Ca. 20 pct. Private regulated 0 -
Private –
non regualed
Ca. 2.300 Ca. 10 pct. Private –
non regualed
214 Approx. 0,5 pct.

Ownership and management of services.

Look at the table above.

Country profile

Area – 43.000 km2; Population – 5,6 million, Population density – 250 inhab/km2; Share of urban population - 85%; Number of households – 2.749.000. (2012); Average households’ size - 2,1 (2012); GDP per capita – 37.315 EUR (2011).

Main indicators of the water sector

Extracted water volume – 288 million m3; Wastewater treated– 350 million m3; Turnover – 2 billion Euros;


As a consequence of the regulation tariffs are stabilized, more or less. Before the regulation was implemented in 2009 prices had increased over a period of approx. 5 years. Since 2009 investments, especially in waste water utilities, have increased, whereas operating expenses have fallen for both drinking and waste water utilities. The same development is expected in the short run. In the long run, the rate of the reduction in operating expenses is expected to decrease, and as a consequence there will be more focus on reducing cost of investments.

« back