Speaking at Utility Week Live, Wessex Water chief executive Colin Skellett said that this model, which is used in Scotland, will “minimise the role of the regulator and maximise the role of the customers”.
He added that Ofwat should go further with its outcomes based regulation, which was introduced for PR14, and take a step back to allow the water companies to “own the relationship with their customers”.
Skellett told delegates: “In Scotland the last price review, there was direct negotiation between Scottish Water and independent customer representatives. The Scottish regulator facilitated this dialogue and that is where we have got to move towards.
“We need smart regulation. Heavy regulation just imposes a burden.”
Ofwat senior director for customers and casework Richard Khaldi, who was also speaking at the conference, agreed that “as a regulator we need to take a step back and allow companies to own the relationship with customers, being there as a backstop”.
He said the PR14 has started to make the water companies own the relationship with customers, but that a move towards a Scottish-like system is where Ofwat should be heading for PR19.
Khaldi added: “Whether it is like the Scottish system or a different system, it’s about how to embed the customer in the creation of the plans.
“That’s got to be the direction of travel.”