Cox hints at PR24 fast-track reform

Outgoing Ofwat chairman Jonson Cox has hinted at increased benefits for companies that achieve fast-track status in the upcoming PR24 price review.

In a wide-ranging interview with Utility Week, Cox said that the original reputational benefits associated with fast-track status, first introduced in the PR14 review, are “worth less than [he] thought.” He added: “That’s why, going forwards, I wouldn’t be surprised if we saw a balance of incentives for fast track.”

Cox added: “You’ll see further build towards the longer term, towards more incentives for really ambitious companies and even more weighting on operation and performance outcomes.”

Ofwat’s methodology for the upcoming price review will be published in July. The regulator introduced fast-track status, then known as enhanced status, in PR14, when it was achieved by South West Water and Affinity Water.  In PR19, it was achieved by Severn Trent, South West Water and United Utilities.

Cox refused to be drawn on whether the regulator would use PR24 to drive down bills in light of the current cost of living crisis, but said: “You can’t ignore affordability for customers because it goes to legitimacy, to how they think about you. You’ve clearly got to invest, you can’t ignore the environment… You’ve got to find a balance that works.”

In the interview, ahead of his departure at the end of June after ten years in office, Cox spoke out about his record of reform, his relationship with the industry and the CMA appeal. See the full interview here.