CCW questions whether the CMA has listened to customers

CCW has criticised the Competition and Markets Authority’s (CMA) provisional PR19 findings for failing to fully consider the consumer perspective.

In a blog, CCW's head of policy and research, Mike Keil (pictured), said there is a lack of clarity over how consumer evidence has been used, and that both affordability and customer perceptions of the industry could suffer as a result of the CMA loosening Ofwat’s final determinations on Northumbrian, Anglian, Yorkshire and Bristol Water.

Keil pointed specifically to the CMA’s cost of capital (WACC) increase. “The CMA’s decisions on the WACC and the removal of the gearing outperformance sharing mechanism – both of which appear to tip the balance in favour of shareholders over customers – do not appear to have considered either the potentially damaging effect this will have on customers’ perceptions of the water industry.”

He added there is a lack of transparency over the impact these changes will have on customers’ bills and that at CCW: “We are very concerned about the affordability of these increases given the impact of Covid-19. These bill increases, coupled with annual inflation, could be a tipping point for some struggling households.”

Separately, a report in the Sunday Times mooted the possibility that Ofwat may seek a judicial review should it be dissatisfied with the CMA’s final decisions in December.

Tomorrow (27 October) at 9am is the deadline for responses to the provisional findings.