Ofwat final determinations reject Anglian’s case for a price cap rethink

The four companies that had their non household retail price proposals turned down by Ofwat at the draft determination stage in September – Anglian Water, Welsh Water, Northumbrian Water and Thames Water – had mixed fortunes yesterday when the regulator issued final determination decisions.

Anglian and Northumbrian submitted further information in support of their PR16 proposals after the drafts were published, with success for the latter but no movement for the former. Ofwat said Anglian’s information was not up to the standards prescribed in its PR16 statement of method and hence that the company’s PR14 price caps would stand. The regulator found Northumbrian’s clarifications and supplementary evidence convincing and accepted its PR16 proposals.

Welsh Water and Thames revised their proposals in response to Ofwat’s draft determinations and the regulator accepted the revised positions.

In addition, Ofwat said:

• Yorkshire Water was asked at the draft stage to provide more information to support the minor changes it had proposed; it had done so satisfactorily and hence its proposals were accepted.

• The remaining 12 companies accepted their draft determinations – all of which were based on proposals they had submitted with the exception of South West Water’s proposal for Bournemouth Water. The regulator modified this and used the modified caps as a basis for draft determinations for Bournemouth, which South West Water subsequently accepted.

• There was to be no increase the overall allowances for costs and net margins previously specified.

Ofwat yesterday published notifications of its final determinations for all 17 companies and gave each until 15 February to notify it in writing should it wish to pursue a CMA referral (though this is a highly unlikely course of action for any of the companies whose settlements were based on their own proposals).

The price controls will run from 1 April 2017 and 31 March 2019.