Speaking at the Water UK City Conference on Wednesday, Cox said that for the price control period starting in 2020, there will be a “dynamic upper quartile standard that moves during the period”.
This contrasts to the fixed benchmarks set out in the PR14 final determinations, under which all the water companies have the potential to achieve, and be subsequently rewarded for.
Cox said by making the benchmarks targets dynamic for PR19, it will mean all the water companies will have to set themselves stretching targets leading to fewer interruptions, better drinking water quality, fewer pollution incidents, and improvements to resilience.
He added: “That is us doing exactly what we should which is trying to simulate the effects of competitive markets on a monopoly sector.
“You’ve heard it now, so you can start to think about that.”
Cox also told delegates he personally believes the customer challenge groups that helped to shape the business plans of the water companies during the PR14 process “may have been hindered by not having good enough contemporary and competitive information on other companies”.
He added the challenge groups “did a good job of mastering what must have felt like a deluge of data” and that in the future consistent and accessible data needs to be available to them to ensure appropriate targets are set for the water companies.
Cox said that if the groups had access to this information during PR14, it would have helped them to endorse the targets subsequently imposed by Ofwat.