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United Utilities’ has earned £30 million less than it anticipated from outcome delivery incentive rewards due to extreme weather.
The company said it will achieve its “highest ever” net ODI reward of £34 million for the year to 31 March 2024 and remains on track to earn a similar amount next year.
UU’s full year results explained that reward was lower than previously anticipated due to the extreme weather, including 14 named storms since January 2023. The company said this had a £30 million adverse impact on what it otherwise expected.
Chief executive Louise Beardmore said: “Colleagues have worked exceptionally hard throughout the year to deliver for our customers, communities and the environment. As a result, operational performance has been strong, and I am pleased to report that we have met or exceeded around 80% of our regulatory targets, and we have also been ranked as the number one water and sewerage company for customer service in the independent UK Customer Service Index.”
Performance was strong on water quality improvements through a programme of cleaning and re-lining of the Vyrnwy Aqueduct, improving hydraulic flood risk resilience, enhanced water service resilience, reducing sewer blockages, reducing voids, and reducing lead risk.
It met its leakage reduction target for an 18th consecutive year, the company said, and is repairing one leak on average every five minutes.
However, the company said: “Exceptionally high rainfall has adversely impacted performance on our flooding and pollution performance commitments.”
The company has earned a cumulative reward of £103 million so far in the current asset management period (AMP7) which is “significantly higher” than the £44 million reward it secured in AMP6.
Beardmore added that the company was “readying its supply chain” in anticipation of ramping up programmes of work in AMP8.
The company proposed a total expenditure of £13.7 billion in between 2025-30, with bills to jump 14% from £455 to £518 by 2030.
This will include more than £3 billion to addressing the number of combined sewer overflows across its region, which is one-third of the total spending on overflows across the sector.
It has 2,192 of the 14,000 overflows nationally and 54% of its sewer network is combined, compared to an average 33% nationwide.
By 2030, UU pledged to reduce spills from overflows by 60% by spending on 437 of its overflows.
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