The review by Peter Grant comes after an ACT Auditor-General report sharply criticised the agencies responsible for Canberra water charges and cleared the way for an appeal against a price cut that saved households $80 a year.

Its terms of reference will consider how regulated water and sewerage prices are set in the territory as the government seeks improvements to the independent price regulations.

The ACT government's response to the April report by Auditor-General Maxine Cooper included a commitment to the establishment of a review into pricing processes, and consideration of the territory's legislative, governance and administrative arrangements.

Mr Barr said the former deputy secretary and first assistant secretary for economic and policy analysis in the Department of Employment, Education and Training also had extensive public policy analysis and review experience.

Mr Grant has previously been involved in major reviews of Australian government grant programs and Indigenous programs, as well as a review of the Australian Bureau of Statistics' national education and training statistics unit, and a review of the job seeker compliance framework.

"I am convinced that Mr Grant will bring a new and independent perspective in considering potential improvements of the pricing framework and will deliver recommendations for a flexible and responsive pricing structure for water and sewerage in the ACT," Mr Barr said in a statement on Tuesday.

Dr Cooper's review found a breakdown in relations between Actew Water and the body that sets water and sewerage prices in the ACT – the Independent Competition and Regulatory Commission.

Relations had reached an impasse as Actew disputed the commission's method and price ruling for the essential services. At the same time, the commission accused Actew of obstructing its price review process and withholding information it requested in the weeks before the 2012 territory election.

The breakdown resulted in escalating legal threats and demands as the commission attempted to force Actew to abandon its position.

Reserving its strongest criticism for the pricing commission, the report found it had stretched its authority, departed from previous practices, lacked detailed guidance on procedures for setting water and sewerage prices, lacked planning and did not produce promised reports when it said it would.

The pricing commission billed Actew Water $2.36 million for the fumbled pricing decision. Actew Water said it spent $3.97 million of its own money on the process, bringing the total bill to $6.3 million for a pricing decision that now has a question mark over validity.

A day later, pricing commissioner Malcolm Gray hit back and said parts of auditor-general's report defied logic. He warned it could give readers a false impression of the process and "unnecessarily alarm the ACT community".

In March, it was reported Mr Barr had not yet established a panel to hear Actew's appeal against a decision to cut water and sewerage prices.

As a result, Canberra households had been enjoying an $83-a-year average cut to water and sewerage prices.

The Independent Competition and Regulatory Commission disagreed with the need for the review, arguing the Auditor-General's findings "have not been substantiated and cannot be sustained".

Actew noted the call for a review.