ECA has been contracted to advise the Consumer Council for Water on the appropriate cost of capital for the water companies in the upcoming 5 year regulatory period of Ofwat’s PR14 price review. ECA’s analysis will focus on the weighted average cost of capital (WACC) and the recent financial performance of the companies. The recommendations will take account of both the water sector’s investment requirements and the consumer perspective. This report builds on our earlier work on the cost of equity and cost of debt to develop a position on the full cost of capital for the Consumer Council for Water to promote in its contribution to Ofwat’s review.