Bristol Water has rejected Ofwat’s final determination on grounds of financebility and requested a referral to the Competition and Markets Authority (CMA).
The water-only company, which appealed its PR14 decision five years ago, joins Yorkshire Water as the second company to ask for an appeal of its 2020-25 business plan.
Chief executive Mel Karam said: “Operating Bristol Water in the best way possible for our region and its people, and for our employees, is at the heart of everything we stand for and have stood for, for generations. Although there is a lot we agree with Ofwat on, there are some technical issues, mainly around how to finance our company, that we don’t agree with.”
The final determination included 14.8 per cent reduction in bills, compared to the 5.4 per cent reduction proposed by the company, and the totex allowance from Ofwat was £31.8 million lower than requested by the company after the draft determination.
Elsewhere in the final determination the total allowed revenue was £553.3 million, compared to £603.5 million requested by Bristol.
Ofwat has allowed Bristol £29.9 million to invest in improvements to service, resilience and the environment.
“Despite our decision today, we will continue to serve our region, our customers and our local communities to the best of our ability and will maintain a strong social purpose at the heart of everything we do,” Karam added. “We have already announced our ambition to reduce leakage from our network, which is already the lowest level in the industry, and reduce bills by on average £10 (5 per cent) from April 2020.”
The company’s key performance commitments in the final determination included a 21.2 per cent leakage reduction on a three-year average basis, a 6.3 per cent drop in per capita consumption and a 59 per cent reduction in water supply interruptions to five minutes.
The determination outlined bespoke performance commitments – including a 54 per cent reduction in customer contacts about drinking water appearance, a 29 per cent fall in properties at risk of receiving low pressure and a 13 per cent increase in local community satisfaction.