Water supply

What is to become of the Wocs?

The efficacy of the regulatory stick was clear this week, as the majority of water companies fell into line with their revised business plans. Wessex Water, United Utilities, Severn Trent – even the usually recalcitrant Thames Water bowed to the inevitable and accepted Ofwat’s 3.85 per cent vanilla weighted average cost of capital (Wacc). Mind you, Thames is never far from the negotiating table; it says the sums don’t add up and that the only way it can make the lower Wacc work is by holding back £108 million of wholesale cost savings. This latest sally is unlikely to be the last round in the negotiation, but there are at least some horses to trade for the regulator and the UK’s largest water company.

11 years ago