Severn Trent, United Utilities and Northumbrian Water are among several water companies this week to accept Ofwat’s latest proposals to modify licence conditions.

Pennon Group, parent group of South West Water, Wessex Water, Yorkshire Water and Sembcorp Bournemouth Water have also replied to the regulator with approval of the licence changes.

This morning, Severn Trent said in a message to the London Stock Exchange:

“The Board of Severn Trent Water, the UK based subsidiary of Severn Trent Plc, has agreed to accept the Section 13 Notice issued by Ofwat on 21 December setting out proposed changes to its Licence.

“Severn Trent Water looks forward to continuing to work with Ofwat on the evolutionary reform of the water industry.”

Also this morning, United Utilities announced:

“After careful consideration, United Utilities Water PLC (UUW) is pleased to advise that it has accepted the revised ‘Section 13’ licence modification proposals from Ofwat, which were published on 21 December 2012.

“This follows extensive, constructive discussions between Ofwat, UUW and other water companies. The Board of UUW considers that the revised licence amendments have reduced uncertainty for investors and customers, compared with the previous proposals issued on 26 October 2012.”

Northumbrian Water was the first company to accept the proposals. Chief executive Heidi Mottram stated in her letter to Ofwat that the company had accepted the revised proposals of December 2012 and would continue to work in a constructive manner with Ofwat but said:

“We feel  there  may  have  been  a  better way  to  underline the  commitment to  a  constructive working relationship,  in  particular in  relation to the  evolution  of price  controls,  than  including a  commitment  in  the  licence.”

She added that Northumbrian was “pleased to put the uncertainty regarding licence changes behind us” and to focus on the PR14 price review.

Colin Skellett, Chairman of Wessex Water, stated in his letter to Ofwat that the Board consents to the modification and “Ofwat’s willingness to discuss the proposals so openly with companies is most welcome.”

He added Wessex Water has always worked in an open manner with Ofwat and will continue to do so.

Managing Director of Sembcorp Bournemouth Water Roger Harrington said that Ofwat should consider “very carefully” the allocation of meters installed after April 2015.

In his letter to Ofwat he stated: “Whilst it is clear that some of the activities associated with metering mater reading could be contestable, we believe that a situation whereby some meters are allocated to the wholesale part of the business and others to the retail part will lead to confusion and the potential for errors in business processes.”

He said that due to the wholesale part of the business having as much need as the retail business to know the volumes passed through a customer meter, meters should remain part of the wholesale business, with associated operational activities undertaken by whoever is best placed to carry them out.

Yorkshire Water CEO Richard Flint wrote a brief letter accepting the proposals while Pennon Group released a short notice yesterday.

Ofwat’s latest consultation on the ‘Section 13’ licence change was the third version after water companies had rejected the previous two incarnations due to worries that investor confidence would be affected.

It had wanted to move parts of water company businesses — representing about 40% of revenues — from the price control framework from 2020, creating uncertainty over the level of returns which could have had an adverse impact on customer bills.

In its revised proposals in December, Ofwat made significant concessions to the water companies as it allowed for separate price controls for wholesale and retail services and did not provide any flexibility in relation to wholesale controls.

The consultation closes 23 January.