Water companies set out plans for 2020-2025
All water companies across England and Wales yesterday submited their business plans for the years 2020-2025 to Ofwat.
As part of Ofwat’s 2019 price review, all water companies must set out a detailed business plan outlining how they will meet the needs of their customers from 2020 to 2025 and beyond. Plans should cover a range of matters including: what companies propose to invest, what they propose to charge customers, how they will support vulnerable customers and how they will ensure the long-term resilience of their infrastructure and operations.
Ofwat will scrutinise all of the business plans before publishing an initial assessment of each company’s plan on 31 January 2019, where it will categorise companies’ plans according to the level of quality, ambition and innovation they have demonstrated. The best plans could benefit from incentives through the price review process, while those that fall short will face closer scrutiny and interventions and could receive lower returns.
Ofwat will make final decisions on the services water companies must deliver and limits on the prices they can charge customers in December 2019.
Ofwat Senior Director for Strategy & Planning, John Russell, yesterday said:
“We’ve reached a key milestone in our price review process. From now until January 2019, we’ll pore over each and every business plan and we’ll be looking for evidence that they are robust, ambitious and, crucially, that they have been shaped by customers.
All companies have had an opportunity to develop high-quality plans, but where plans aren’t sufficiently ambitious or stretching, we’ll step in to protect customers and the environment.”
Notes to editor:
- In developing their business plans, Ofwat expected companies to actively, meaningfully and effectively engage with customers and stakeholders to gain an in-depth understanding of customers’ requirements for environmental outcomes and investment.
- Ofwat will publish an initial assessment of each water company’s business plan on 31 January 2019. Ofwat will categorise companies depending on the level of quality, ambition and innovation they have demonstrated in their plan. The categories will be: exceptional, fast-track, slow-track and significant scrutiny.
- Both exceptional and fast-track business plans will benefit from procedural and financial incentives, through an early determination with early certainty on specified components of costs and outcomes.
- Business plans categorised as significant scrutiny will receive reduced cost sharing rates and potentially capped outcome delivery incentive outperformance payments.
- In March/April 2019, Ofwat will publish draft determinations for companies with exceptional & fast track plans
- By April 2019, companies categorised as either significant scrutiny or slow track must submit revisions to their business plans addressing the shortcomings Ofwat has identified
- In July 2019 Ofwat will publish draft determinations for companies categorised as either slow track or significant scrutiny
- In December 2019 Ofwat will publish final determinations for all companies.
- For further information on Ofwat’s 2019 price review: https://www.ofwat.gov.uk/regulated-companies/price-review/2019-price-review-final-methodology/
Ofwat Press Office:
Tel: 0121 644 7642
Latest News from
Business retail water market: Three more big businesses take the plunge into self-supply04/12/2018 15:15:15
Pub, cider and beer company Heineken UK, pub company Stonegate and textile rental and laundry service company Elis, have become the latest companies to be granted licences to self-supply in the business retail water market by economic regulator Ofwat.
Ofwat calls for fairer, faster, more hassle free compensation for water customers23/11/2018 10:25:00
Water regulator Ofwat has recommended an overhaul of compensation arrangements for water customers who are left off supply.
Ofwat eyes measures to shore up water companies’ financial resilience20/11/2018 14:25:00
Ofwat is today moving to strengthen water companies’ financial resilience by calling on them all to adopt a common set of standards.
Ofwat consults on underperformance and outperformance payments for four water companies01/11/2018 15:25:00
Ofwat will today begin consulting on proposed outperformance and underperformance payments for four of the seventeen water companies in England and Wales, to be applied from April of next year.
Ofwat calls for more transparency in meter reading services for the business retail water market05/10/2018 10:15:00
Ofwat has written to all water wholesalers and retailers to ask them to improve transparency around meter reading services in the business retail water market.
Water companies submit improvement plans following ‘Beast from the East’ review28/09/2018 15:20:00
Water companies across England and Wales will today submit plans detailing how they are addressing the shortcomings identified in their handling of the ‘Beast from the East’.
Ofwat consults on modernising water company licences20/09/2018 13:20:00
Ofwat is to consult on proposals to simplify some of the licence conditions of water companies across England and Wales to set out companies’ obligations in clear, accessible and understandable language.
Price Review 2019: Ofwat to test water company business plans12/09/2018 12:15:00
Ofwat has begun to scrutinise water companies’ business plans for the next price review period (2020-2025), with the regulator due to publish its initial determination for each company’s plan in January of next year.