PR19: Ofwat reveals its hand for the first time

"While no company reached the dizzy heights of the exceptional category, the three companies, which are all listed on the London Stock Exchange, were placed in fast track"

Since 3 September last year, Ofwat has maintained its poker face about water companies’ individual business plans for 2020 to 2025.

But in a key milestone for the regulator’s 2019 price review, PR19, it revealed its hand for the first time when it published its initial assessment of the hefty documents on 31 January.

And what did its hand reveal? Three of a kind.

Severn Trent, South West Water and United Utilities were all given the green light so they can get started on delivering their plans for customers.

Ofwat praised the companies for setting a “new standard” for the sector.

While no company reached the dizzy heights of the “exceptional” category, the three companies, which are all listed on the London Stock Exchange, were placed in “fast track”.

The top performers’ plans set out how they will cut bills by up to £70 in real terms while significantly improving support for vulnerable customers and deliver real change in the areas that “matter most to customers” such as cutting leakage, Ofwat said.

With 17 water companies in England and Wales, David Black senior director at Ofwat told Utility Week on the day that “it would have been nice” to have more make it into fast track.

“But we’re certainly thrilled that we’ve got three in there now.

“They cover roughly 30 per cent of the population so that’s still quite an achievement,” he said.

The regulator wasn’t as impressed by the level of quality, ambition and innovation in the remaining companies and will be “pushing” them to go further.

Ofwat also had “two pair” in its hand with four companies finding themselves at the other end of the scale under “significant scrutiny”.

Water and sewerage companies Thames Water and Southern Water were joined by water only companies Affinity Water and Hafren Dyfrdwy.

They will all have to “substantially rework” their plans before resubmitting them to Ofwat by 1 April.

All remaining companies were placed in “slow track” and will also be required to resubmit their plans. The game still has a long way to go but with such high stakes on the table no company will want to fold now.