So the water regulator, and the sector itself, are to be all the more commended for pulling together and delivering a very different price review on time and politically on message. Under Jonson Cox’s chairmanship, Ofwat anticipated the cost of living storm and started making the right noises back at the beginning of the year. To their credit, the companies listened and the vast majority this week were able to proudly announce that they intended to keep price rises at or below the rate of inflation until 2020. Ofwat’s chief regulation officer, Sonia Brown, is to be praised for keeping the price review on track during what she once called with wonderful understatement, “difficult times”.
It could have been so different. If the regulator had failed to understand and act on the public and political mood, or the companies had failed to listen, the water sector could be facing a similar disaster to energy retailers. As it is, Thames Water aside, the companies have come out of this week with the sort of positive headlines their energy cousins can only dream of.
They should enjoy it while they can. For all that we’ve heard about PR14 in the run up, the price review in earnest has only just begun. As new Ofwat chief executive Cathryn Ross, writing for us this week, emphasises (p6) – the regulator’s agenda is firmly focused on customers. Will the balance between bill cuts and investor returns proposed in business plans be enough to satisfy Ross and Cox? Don’t count on it.