CCWater React to Ofwat’s Initial Assessment of Plans



Following Ofwat’s Initial Assessment of Plans, the consumer watchdog CCWater have published five lessons learned from the process.  They are summarised below

Ofwat have four different categories reflecting their view of the quality of each plan but ‘exceptional’ status proved beyond everyone’s reach. CCWater state they did not see any proposals that could be considered the finished article. Every company – even those that were fast tracked – has room to stretch itself further in their opinion.The regulator did spring a surprise by introducing a new common Performance Commitment (PC) to measure water companies’ support for vulnerable customers. But it doesn’t go far enough for CCWater. For example, they would like to see a common PC for helping customers who cannot afford their bills and promise to keep making the case for this to be included.Ofwat was disappointed that companies had not voluntarily proposed ways of protecting their customers from unexpected bill hikes caused by Outcome Delivery Incentives (ODI) rewards. These are the rewards companies can earn for achieving certain targets, for example, reducing leakage or internal sewer flooding. CCWater advocate putting the cap back on ODI rewards and not allowing it to be removed once price limits have been set.CCWater believe not many companies have ‘over-cooked the pricing of their costs and proposed investment programmes’ – some by more than 30 per cent, according to Ofwat’s assumptions. They will therefore be watching closely to make sure companies do not short-change customers on important areas like maintenance, or investing for the future, in order to look more efficient.One other surprise was the whopping £360 million that is being made available for a number of companies to look at the feasibility of multi-company water transfers and new shared water resources. These investigations are part of wider efforts to ensure the industry can continue to meet the increasing demands we place on our supplies. Although taking a strategic approach is very sensible, and one CCWater welcome, it’s important to protect customers from paying for schemes that they will never benefit from. CCWater will be seeking further clarity on how this will work.

https://www.ccwater.org.uk/blog/2019/02/19/5-things-we-learned-from-ofwats-initial-verdict-on-company-plans/

Case Studies

South West Water
Thames Water
Irish Water