Last edited 18 Jul 2019

2019 Price review draft determinations for water companies

On 18 July 2019, Ofwat published price review draft determinations for 14 of the 17 water companies in England and Wales, including proposals for investment, service improvements and lower bills for customers. This will involve water companies investing an additional £6 million a day over the next five years to improve the environment and services whilst also cutting bills. Bill reductions range from £7 for Hafren Dyfrdwy to £110 for Northumbrian Water.

In what they describe as ‘the most far-reaching price review the regulator has ever undertaken’ other proposals include targets to:

Cut pollution incidents by more than a third.
Reduce supply interruptions by almost two-thirds.
Help 1.5 million customers who are struggling to pay.
Cut leakage, saving water equivalent to the needs of the population of Manchester, Leeds, Leicester and Cardiff.

Ofwat suggest that extreme weather events, climate change and population growth mean water companies need to make sure they are doing everything they can to provide safe and reliable water and wastewater services whatever the future brings. The review proposes an additional £12 billion investment to improve services for future generations, including building reservoirs, moving water to where it is needed most, and protecting the environment.

Ofwat Chief Executive, Rachel Fletcher, said: “The package we are unveiling today signals a brighter future for customers, with better services, a healthier natural environment and lower bills. To get there we are calling for extra investment of £6 million each and every day to improve the environment and provide services for a growing population. At the same time we expect to see customers’ bills cut by an average of £50. These are seriously stretching goals for the sector, but we know they can be achieved. We have seen three water companies leading the way and we now want the rest to show the ambition and drive to deliver this new era for customers and the environment.”

Water companies have the opportunity to provide new evidence if they consider Ofwat’s draft determinations will prevent them from delivering for customers and the environment, and this will be followed by a final determinations on 11 December. Water companies then have until 11 February 2020 to decide whether to accept the final determination or to request an appeal to the Competition and Markets Authority.

NB Severn Trent, South West Water and United Utilities, have already been fast-tracked through this stage of the price review in recognition of their high-quality plans for the next five years.

The draft determinations can be found here: https://www.ofwat.gov.uk/regulated-companies/price-review/2019-price-review/draft-determinations/