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Ofwat has been asked by companies appealing their final determinations for PR19 to alter the charging deadline to accommodate changes set by the Competition and Markets Authority (CMA).
The CMA confirmed last month it will publish in mid-February, which would mean appellant companies miss the charging deadline set by Ofwat. Household and wholesale charges must be set in January to come into effect in April.
The date of the final decision caused contention for companies that would be unable to apply the re-determined prices until April 2022.
Ofwat raised concerns the four appeals had been rushed and urged the CMA to make full use of its available time instead of completing in December.
Three of the appellant companies, Anglian, Bristol and Northumbrian, have written to Ofwat after discussions with the CMA to request to apply the price controls determined by the CMA for the 2021/22 period. Yorkshire has not made a similar request.
This would allow potential changes in allowed revenues for the 2020-25 period to be recovered over the four remaining years rather than three starting from April 2022.
Ofwat said it is considering options for implementing the CMA’s final ruling and the appellant companies have offered to provide indicative charges within a range ahead of the price controls being finalised.
The default position remains to implement the charges over three years of the five-year period, which would give companies less time to smooth to the impact of changes to the price limits within the period.
The companies said implementing revised price limits would let them smooth bills over a longer period thus reducing the final year bill hike.
It would give companies financial headroom to continue with activities.
Thirdly, it would let them undertake investment in capital projects that were not fully funded in Ofwat’s determination, such as Northumbrian’s transfer scheme and Anglian’s interconnector project.
Ofwat will consult and publish its decision in the new year.
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