Water | Price Review 2019 - Industry Transformation
17 Dec 2019 02:36 PM
Yesterday, 16 December 2019, the Water Regulator (Ofwat) has published the Price Review 19 final determinations, which contains a number of key demands for water companies in England and Wales over the next five year.
The £51 billion package also includes £469 million to address long-term drought challenges, more than £1 billion to help protect from flooding and identifying and helping an additional two million customers, who need extra support.
Other demands include reducing mains bursts by 12% and reducing pollution incidents by 12%.
In the document, the regulator also says it recognises that Londoners deserve a better level of service, so it will allow Thames Water to bid for up to an additional £480 million to deliver improved service resilience.
But in order to access this, Ofwat added that they will need to pass a series of tests and Thames’ investors will also need to provide substantial additional funding.
Infrastructure for Increased Resilience
- The package includes £13 billion for new and improved services that go above and beyond water companies’ day-to-day operations. This includes more than £1 billion to reduce the impact of flooding on communities across England and Wales.
- There have been allowed almost £500 million to support 17 major resilience schemes, including developing new water resources and the transfer of water across the country.
Protection of the Environment
- The water sector is taking a step forward with its commitment to achieve net zero carbon emissions by 2030.
- Stretching performance standards across all companies have been set in important areas like supply interruptions, bursts, leakage, and increasing help for vulnerable customers.
Affordability of Bills
- All these improvements will take place alongside an average 12%, or about £50, fall in bills, before inflation. This can be achieved as a result of the £6 billion efficiency challenge and lower financing costs, with the lowest allowed return on capital since privatisation 30 years ago.
PR19 final determinations: Overview of final determinations
UK Government priorities and our 2019 price review final determinations
Welsh Government priorities and our 2019 price review final determinations (in English)
Blaenoriaethau Llywodraeth Cymru a’n penderfyniadau terfynol ar gyfer adolygiad prisiau 2019 (yn Gymraeg)
PR19 final determinations: Policy summary
PR19 final determinations: Overall stretch on costs, outcomes and cost of capital policy appendix