Costs and benefits of private versus public ownership in utilities depend on differences in incentives, in turns attributable to different allocations of residual control rights. The corporate structure of the production unit is, under this perspective, of secondary importance. It is argued that, as for incentives, it is irrelevant whether the state owned enterprise is a corporate company (plc) or an in house provider.Whatever the corporate structure, the public monopolist suffers from soft budget constraint and lack of incentives for efficiency. Contracts between local authorities and publicly owned providers lack credibility and enforceability, whilst command and control can be more effective.Transforming an in house provider into a plc is wise only as a preparatory step when privatization is firmly planned.