South West Water has announced this morning that it has accepted Ofwat's invitation to adopt the principles of the regulator's risk and reward guidance published on 27 January 2014.

Ofwat announced on 10 March, following a detailed assessment of the 2015-20 business plan of Pennon Group's subsidiary, South West Water, that its business plan had pre-qualified for 'enhanced' status.

South West Water was the only water and sewerage company to have a 2015-20 business plan that pre-qualified for 'enhanced' status, together with water only company Affinity Water.

South West Water submitted its five-year business plan to Ofwat in December 2013, following its biggest ever consultation; a public approval rating of at least 84 per cent; and the support of the independent WaterFuture Customer Panel.

The company has submitted an updated business plan to Ofwat reflecting these principles – it will now await Ofwat's confirmation on 4 April 2014 that the new proposals are acceptable to the regulator and are in line with its guidance.

Ofwat has stated that it will publish draft determinations for enhanced companies on 30 April 2014.