Price review 2024 (PR24) will cover the period 2025 to 2030. Anglian Water is actively engaging with Ofwat through various discussion documents and working groups on how PR24 should be regulated.

Ofwat published the ‘PR24 and beyond: Creating tomorrow, together’ discussion paper at the end of May 2021. Our response can be found here.

 

Following this, Ofwat published a suite of discussion papers in November 2021 and December 2021. In totality, these engage on most of the major aspects of PR24 – development of long term strategies, ODIs, approach to cost assessment and risk, return and financial resilience.

The suite of papers published by Ofwat are set out below, along with our responses submitted:

 

  1. PR24 and beyond: Long-term delivery strategies and common reference scenarios – deadline Thursday 6 January. Response here.
  2. PR24 and beyond: Performance commitments for future price reviews – deadline Thursday 13 January. Response here.
  3. Financial resilience in the water sector: a discussion paper - deadline Monday 31 January. Response here.
  4. PR24 and beyond: Discussion paper on risk and return - deadline for response is 2 February. Response here.
  5. Assessing base costs at PR24 – deadline Thursday 3 February. Response here.
  6. Our Proposed approach to funding bioresources activities at PR24 - deadline 5pm Thursday 10 February 2022. Response here.
  7. RAPID - The regulatory and commercial framework for strategic water resources solutions – a consultation – deadline Wednesday 26 January. Response here.
  8. Net zero principles position paper.

 

We are responding to all of these papers in line with the deadline.

 

We welcome the significant development in the price review framework signalled in the Long-term delivery strategy and common reference scenarios. The paper shifts the principle focus from business planning over a five-year window towards long-term plans and contextualisation of companies’ business plans within a long-term delivery strategy. Our sector naturally has along-term focus and at Anglian Water we consider ourselves custodians of the assets and the natural environment which will be used by generations of future customers. This philosophy is underpinned by our Articles of Association which enshrine our purpose of delivering positive social and environmental outcomes for our region. We believe that this aligns with this evolution of Ofwat’s regulatory policy.

 

The expected timetable for PR24 is similar to PR19; with the draft methodology consultation expected summer 2022, final methodology expected in December 2022 and final business plan submission in October 2023.

 

We have recently worked with Nick Fincham at Skylight Consultancy to produce a discussion paper looking at price control regulation and the long term.

 

it is a very useful summary of the different ways in which Ofwat’s approach to price control regulation can, inadvertently, push companies towards adopting short-term solutions.  This is plainly contrary to our shared ambition to serve the long term interests of customers and the environment.

 

The report makes recommendations on how Ofwat’s approach to price control regulation could be reformed better to reflect the long term interests of customers and the environment.

 

We therefore recommend the report to all those – in Government,  Ofwat and elsewhere – with an interest in supporting the water industry to perform to high standards, not just in the short term, but for future generations too.

 

You can find the discussion paper here.