Severn Trent, South West Water and United Utilities have welcomed Ofwat’s draft determinations for their business plans for 2020 to 2025.
The regulator said the three fast track companies meet Ofwat’s “stretching expectations” across the four themes for PR19 – affordability, great customer service, long-term resilience in the round and innovation.
Ofwat said: “We set high expectations for water companies at the 2019 price review. We pushed them to go further than ever before, improving efficiency, customer service and resilience.
“We asked them to share any gains they make through financing arrangements with their customers. We asked them to make sure their policies on dividends and executive pay align with the quality of service provided to customers. We asked them to look well beyond the next five years to meet the needs of future customers – and to protect and improve the natural environment.”
Severn Trent, South West Water and United Utilities submitted plans that “set a new standard” for the sector.
The companies have not only received their draft determinations from the regulator earlier than other water firms, they will also receive “financial and reputational benefits”.
South West Water is the only company to have its plan fast-tracked for approval in two consecutive price reviews. The water company, which is owned by Pennon, said it was pleased to have been given a “vote of confidence” from the regulator today (11 April).
The water company’s “New Deal” business plan “offers customers lower bills, further investment, a unique share scheme and more control in how the company is run.”
Dr Stephen Bird, managing director of South West Water, said: “We’re pleased that the regulator thinks our plan sets the standard for the sector. It was shaped by our biggest ever customer consultation and we’re very grateful for the feedback we received. We listened very carefully to what was said and acted on what we heard.
“Our New Deal empowers customers to be part of our business and have more control, redefining the relationship between a water company and its customers. We look forward to continuing to make a real and positive difference in the communities we serve.”
United Utilities said it is reviewing the draft determination and will respond to Ofwat by the required date next month.
“In Ofwat’s initial assessment of company business plans, we were pleased to have achieved fast-track status and to have received the highest grades overall for the sector. Ofwat commended our plan in many areas including customer engagement, affordability and vulnerability, resilience, innovation and confidence and assurance,” the company said.
Severn Trent said it was pleased to have received the draft determination from Ofwat which confirms its fast track status.
The company outlined highlights from its plan including:
- A commitment to becoming the most socially purposeful company in the sector;
- A bill reduction of c.5 per cent, providing our customers the lowest bills in England for another five years;
- A broad set of performance commitments that will deliver more for its customers and the environment;
- Investment of £6.4 billion across the period contributing to real RCV growth of 3.4 per cent;
- Approval of £156 million of additional investment through our innovative real options mechanism.
The three companies will make representations on their draft determinations and respond to Ofwat by 24 May.
Other water companies had to re-submit their business proposals to Ofwat on 1 April and await further feedback from the regulator, which will be published on 18 July.