Ofwat has published a new discussion paper setting out its emerging proposals for performance commitments in PR24.
The water sector regulator will next specify performance commitments - the metrics Ofwat uses to measure the service that water companies deliver for customers and the environment - as part of the price control as part of setting price limits for the 2025-2030 period (PR24).
The outcomes regime is one of the three main price review building blocks used by Ofwat alongside risk and return and cost assessment.
Ofwat is focusing on outcomes in three areas: excellent service for customers, environmental outcomes, and operational resilience. The regulator is aiming to streamline its choice of outcomes measures in each category by focusing on:
- common performance commitments;
- key outcomes which Ofwat will maintain in the long-term; and
- performance commitments suitable for financial incentives.
Ofwat’s “Time to Act, Together” strategy says that the regulator wants to see more companies achieving and sustaining sizeable improvements in their delivery for customers, communities and the environment.
Ofwat expects the common performance commitments to cover the key areas of companies' performance – and also expects there to be far fewer bespoke performance commitments than in PR19.
The regulator is planning to continue to refine its work in this area in advance of publishing the draft PR24 methodology in June/July 2022, which includes testing the proposed common performance commitments with customers.
Closing date to respond to the consultation is 13 January 2022 – organisations or individuals who want to discuss any aspect of the consultation are invited to contact Peter Jordan by email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Click here to download Ofwat's consultation paper
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