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Ofwat has set out expectations on how companies charge for wholesale and retail in 2015-16.
The consultation sets out Ofwat’s ideas on how further changes in charging over the next five years and beyond – intended “to help stakeholders understand the future direction of regulatory charging policy.”
Ofwat will not issue final rules for charges schemes for next year until the first quarter of 2015, following guidance from the UK and Welsh governments.
The regulator said its expectations were “firmly rooted in government guidance and principles”.
Ofwat added: “Our proposed approach to charging in this consultation is designed to be consistent with the UK Government’s strategic policy statement and published charging principles, and the guidance from the Welsh Government.
“However, due to our current understanding of the expected timing of final government guidance, we will not be issuing final rules for charges schemes until the first quarter of 2015.”
Ofwat also said it was unlikely that there will be a need for significant revisions following the guidance.
Despite this, the regulator said it will issue a brief consultation on the final rules for 2015-16, before the new charging year begins in April 2015, to “explore the need for any potential refinements in the event of such guidance.”
The consultation also sets out Ofwat’s expectations for further changes in charging over the next five years and beyond intended “to help stakeholders understand the future direction of regulatory charging policy.”
Ofwat said that ahead of PR19 from 2020 to 2025, pricing rules will need to be developed to help understand competition in the supply chain from 2020 and assess the appropriate scope and form of price controls for PR19.
“Detailed break-down of water company services and costs could empower customer choice,” said Ofwat.
Ofwat hopes the document will pave the way for further consultations in the future, particularly in the context of the introduction of competition in the non-household sector in 2017.
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