The Competition and Markets Authority (CMA) has been granted an extension of six months to redetermine the business plans of four water companies because of coronavirus.
Ofwat accepted that the workload involved with four referrals – from Anglian, Bristol, Northumbrian and Yorkshire – plus the disruption caused by the pandemic, meant that the initial timeframe of six months to complete the investigation was unreasonable. It has agreed to extend the deadline to 19 March 2021.
The regulator said “given the nature and scale of work involved in four water industry price control references and the possible disruption from the COVID-19 situation” that there were “special reasons why the reports cannot be made within the period specified”.
The four companies requested that Ofwat submit their business plans with the regulator’s determination to the CMA in February.
The CMA usually works to a six-month time frame and, despite having four cases to redetermine concurrently, it had previously said it would complete the appeals to meet statutory deadlines.
The panel handling the appeals was named by the CMA last week: chairperson Kip Meek, Robin Cohen, Anne Fletcher, Roland Green and Paul Muysert.
Although the price review was seen as tough by the water companies, Ofwat defended its final determinations and said the intention was to address the challenges of climate change and population growth as well as tighten up the financial regulation to ensure customers are prioritised.
The regulator said its message was important to tackle “the shortcomings of the past”, saying these included concerns that, in some cases, “more attention has been paid to taking money out for shareholders than delivering for customers”.