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Most water companies in England and Wales will be resubmitting their PR19 business plans to Ofwat today (1 April) after the regulator took a tough stance on all but three at the end of January.
Ofwat will scrutinise the revised documents to determine if the water companies have demonstrated they have addressed the shortcomings Ofwat identified when it published its initial assessments.
The regulator placed four companies in the “significant scrutiny” category and ten in “slow track” for the business proposals covering 2020 to 2025.
Only Severn Trent, South West Water and United Utilities were placed in “fast track” on 31 January while no companies were deemed to be “exceptional”.
Ofwat said at the time that it would be “pushing” the remaining companies to go further to achieve the “new standard” set by the fast-tracked companies.
Thames Water, Southern Water, Affinity Water and Hafren Dyfrdwy all found themselves in the significant scrutiny category,
The regulator said the four firms would have to “substantially rework” their plans and will be under increased regulatory scrutiny.
The remaining companies Ofwat deemed to have “further work to do” in slow track were Anglian Water, Dŵr Cymru Welsh Water, Yorkshire Water, Northumbrian Water, Wessex Water, Bristol Water, Portsmouth Water, South East Water, SES Water and South Staffs Water.
Speaking about today’s resubmission activity David Black, senior director of Ofwat told Utility Week: “We’ve already seen the fast track companies put forward high-quality plans that deliver for customers, propose investment in infrastructure and enhance the natural environment, alongside keeping bills affordable.
“We will scrutinise closely the information the remaining companies submit to make sure they have addressed our concerns and now have plans that deliver more of what matters.”
Water companies had to wait five months to find out what categories they were placed in after they submitted their business plans to Ofwat on 3 September 2018.
A spokesperson for Hafren Dyfrdwy said: “While our September submission had much to be proud of, notably our sector-leading efficiency, we’ve fully embraced every aspect of the feedback from Ofwat and seized this opportunity to deliver even more for our customers in an updated plan.
“Our updated plan has been built on three new areas of customer engagement that allow us to understand various things such as the value customers place on service improvements, how we balance charges over time, and the overall acceptability of our new proposals.
“With this additional insight, and by challenging ourselves against the ideas and plans put forward by other companies, we’ve further increased the improvement we’re committing to make in some areas and have strengthened the design of our customer ODIs [outcome delivery incentives].”
They added: “We’ve also responded to Ofwat’s specific feedback across a number of areas. For example, we’ve created a new performance commitment in relation to resilience. We’ve also provided additional evidence and assurance to show why some of our initial proposals remain right for our customers, such as our social tariff cross subsidy.
“We now look forward to delivering it for our customers.”
Ofwat will publish the draft determinations for companies with fast track plans on 11 April.
Draft determinations for companies categorised as either slow track or significant scrutiny will be published on 18 July, Ofwat has said.
The regulator is expected to publish final determinations for all water companies on 11 December 2019.
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