In most developing countries where the poor people represent a relatively large percentage of the population, provision of utility services to the poor is crucial to policy makers and regulators. This implies that the design of the regulatory framework should aim among others, at increasing access to utility services and improving availability, as well as ensuring affordability and sustainability of these services. There is no doubt that governments and regulators in developing countries agree that electricity and water services to low-income households should be subsidised. The key issue is how to determine the subsidy and how it should be delivered.