The Competition & Markets Authority (CMA) has once again extended its deadline to deliver the final redeterminations for the four water companies that appealed Ofwat’s PR19 decisions.
The CMA’s target to deliver its findings to Ofwat is now set at “mid-March”. Its statutory deadline is 18 March.
It means that gas and transmission networks mulling their own response to Ofgem’s final determinations will not be able to take account of the CMA’s stance on cost of capital. They are due to formally accept or reject their final determinations next week.
The CMA has already shifted the target date for its decision on the business plans of Anglian, Bristol, Northumbrian and Yorkshire Water several times. It had originally been mooted to arrive in late December.
After its provisional findings were far closer to the appellants’ original business plans, a series of working papers with novel approaches to costs left investors and stakeholders pleading against the revisions.
Energy networks had been eagerly awaiting the outcome of the water appeals to understand any precedent on the crucial question of cost of capital.
So far, none of the gas and transmission networks or the electricity system operator (ESO) have publicly accepted Ofgem’s final determinations, which were published in December.
The energy regulator had softened its stance in several areas compared to its draft determinations issued last summer, including raising the baseline profit margin for investors by more than a third of a percentage point.
However, many of the companies remain unhappy with the rate of returns Ofgem has suggested and have accused the regulator of being out of step with the government’s net zero ambitions.
Electricity distribution companies will also be keen to understand what precedents will be set in water to inform their own business plans, the first drafts of which will be submitted this summer. Western Power Distribution became the first of the distribution network operators to publish a draft plan last month.