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Ofwat chief executive Cathryn Ross has ruled out the regulator moving towards a negotiated settlement system, like the one used in Scotland, for future price reviews despite calls for this from the industry.
Speaking in London last week, she said the regulator wants to incentivise water companies to own the relationship with their customers “in a way that is genuine, nuanced, responsive and dynamic”.
For this reason, Ross said that a negotiated settlement system, whereby the companies talk through the price control business plans with a customer representative body, makes her “uneasy” because a third party has been inserted into that relationship.
Earlier this year, Wessex Water chief executive Colin Skellett called on Ofwat to base PR19 on negotiated settlements.
He said the shift would “minimise the role of the regulator and maximise the role of the customers” and allow water companies to “own the relationship with customers”.
However, Ross dismissed this in her speech, and said that while there will be a “step change” in customer engagement for PR19, this will come in the form of incentives and rewards for companies that “really get to know their customers”.
She added that developing these relationships with customers helped build trust and “conveys the idea of what might be called a social licence to operate”.
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