South West Water and Affinity Water prequalify for PR14 fast track

South West Water and Affinity Water has pre-qualified for “enhanced” status and a fast track through PR14, Ofwat announced this morning.

If the companies accept Ofwat’s guidance on risk and reward, including a weighted average cost of capital (WACC) of 3.85%, they will be awarded fast track status.

Ofwat chief executive Cathryn Ross said: “The challenge Ofwat put to all water and wastewater companies was to understand their customers’ needs and wants and reflect these in their business plans. Companies have risen to this challenge with a real change of approach.  They have worked hard to listen to their customers and to use what they have heard to shape and inform their plans.” 

Ofwat’s chief regulation officer Sonia Brown said: “The plans submitted by South West Water and Affinity Water stand out.  These companies have achieved plans of particularly high quality, with a consistent focus on listening and responding to what their customers want. 

“We look forward to continuing a constructive dialogue with all companies, so that they can demonstrate that their plans deliver the best possible outcome for customers.”

Ofwat has also confirmed the next steps in the price review process, which have been adjusted to take account of the results of the pre-qualification tests and ensure an efficient process going forward. This includes an opportunity for companies that have not pre-qualified to accelerate their progress through the price review and request an earlier draft determination by submitting new evidence to Ofwat by the beginning of May 2014. If this new evidence meets the required standard, Ofwat will issue draft determinations for these companies in June 2014.

 Draft determinations for all other companies will be issued in August 2014.