In the United Kingdom, OFWAT (the Office of Water Services) is responsible for economic regulation of the 10 water service companies privatized in 1989 by the British government. OFWAT's interrelated functions include protecting customers' pocketbooks, promoting economy and efficiency of the water companies, and acting as a surrogate marketplace to facilitate competition. The main control OFWAT can exercise is to limit the prices companies can charge to their customers. Because of tougher standards, costs are rising, sometimes to levels difficult for low-income people to manage. Affordability is a prime concern to be considered when costing formulas, reset every five years, are reset in July 1994. Includes 2 references, tables, figure.