Submissions invited on CMA appeals

The Competition & Markets Authority (CMA) has asked for comments as part of the redetermination process for Anglian, Bristol, Northumbrian and Yorkshire on their 2020-25 business plans.

The CMA is inviting views by 11 May on the issues raised by Ofwat and the four appellant water companies from customers, representative groups or other businesses in the sector.

The body said submissions after that date would still be included, but added earlier input would allow for greater engagement.

The four companies have sent their statement of case to the CMA and Ofwat has provided its reasons and proof for the decisions it took on each company for the final determinations.

The input from Ofwat and the four companies will be followed by presentations from each party to the CMA, before responses from each side, and analysis by the CMA.

Due to the coronavirus outbreak a six-month extension was granted for proceedings in anticipation of delay to the process and the added burden the parties would be under to work through this time.

Anglian has strongly rooted its case in its customer engagement that showed a desire for investment to protect the water supply and services now and for the future.

Similarly, Northumbrian’s chief executive Heidi Mottram told Utility Week her customers indeed wanted low prices but not at the expense of reliable water supplies for their children and grandchildren.

Bristol reluctantly made its third appeal to the CMA because of what it said were a series of errors made by Ofwat that would meant the business plan was not financeable. Chief executive Mel Karam told Utility Week that previous redeterminations set a precedent that Ofwat did not follow.

Meanwhile Yorkshire said the penalties and rewards attached to the targets related to unrealistic benchmarks, while the costs allowed to the company were deemed insufficient to deliver improvements needed for its customers.

Ofwat has stood firm on its position that efficient service must be delivered for all customers and companies cannot ask its billpayers to pay more than necessary for their water and wastewater.

In its submission to the CMA, Ofwat said that “an important principle in the price review is that customers shouldn’t pay for inefficiency or to top-up funds to cover companies’ previous shortcomings and help them catch up with others”.

The redeterminations should be completed by the CMA and sent to Ofwat in December, but the pre-agreed extension because of coronavirus may see that date pushed back.