Ofwat seeks consistency on green incentives for developers

Ofwat is consulting until 1 August on establishing a common framework for the environmental incentives (usually discounts on connection charges) water companies offer to developers for meeting certain standards of water efficiency or sustainable drainage.

Under the proposal, all water companies would offer green incentives for water efficiency and sustainable drainage, including minimum connection charging discounts and optional incentives for water recycling/harvesting/water neutrality. These would be underpinned by consistent technical standards, with levels of water efficiency/drainage set by each water company to reflect the local context. Companies would be free to offer bespoke incentives on top of the the common framework should they wish.

Ofwat reasoned that a common approach across the industry would could influence developer behaviour more effectively, particularly developers operating on a regional or national basis. A consistent regime would be easier to engage with, and would reduce developer costs and boost efficiency.

The regulator added that a common framework would also establish a basis and approach for new appointees to be compensated, for example, for investment and ongoing maintenance of development-level water recycling arrangements.

Ofwat plans to undertake a statutory consultation on changes to its new connection charging rules for English companies, to implement the common framework. It said Wales was subject to a different regime, but that many proposals would be transferable.