Ofwat is warning that the delivery of multi-sector reservoir (MSR) systems cannot be subsidised by water customers, saying that “as a principle, public water supply customers should not subsidise other reservoir users and we expect costs to be fairly shared between users.”

Water UK, the body which represents the UK water and wastewater companies, has flagged up a number of concerns and suggested alternative approaches to Ofwat’s initial views on the framework for PR24 and future price reviews.

New evidence submitted to the Competition and Markets Authority’s Price Review investigation is suggesting that Ofwat’s Gearing Outperformance Mechanism (GOM) is flawed and should be rejected, its approach to assessing financeability is inadequate, and the Final Determination appears to be imbalanced in favour of short-term bill reductions at the expense of consumer interests in the medium and long-term.

Southern Water has called into question Ofwat’s 2019 Price Review decisions, saying that its acceptance of the regulator’s final determination (FD) should not be interpreted as accepting that “Ofwat had, in all cases, arrived at the correct balance of costs, outcomes, and financeability.”

Ofwat has said that it stands by its decisions in the 2019 Price Review and the reality is that the disputing companies’ claims that the regulator has not met its statutory duties are “disagreements as to the merits of our decisions dressed up as legal points.”

International investors in the UK water companies led a delegation at a meeting with the Treasury last week to warn that Ofwat’s tough PR19 plans are “unfinanceable” and express their concerns that the regulator has become politicised, according to a report in yesterday’s Sunday Times newspaper

In an Expert Focus article for Waterbriefing, Tom Sharpe QC discusses some of the issues about the water companies' options on deciding whether or not to appeal regulatory determinations in the run-up to the publication of Ofwat’s Final Decisions on the draft Business Plans in the 2019 Price Review. 

The Consumer Council for Water (CCWater) is warning against water companies being able to give to customers with one hand while taking from them with the other in the 2019 Price Review.

Richard Khaldi, water sector expert at PA Consulting Group is warning that the outlook for underperforming companies is bleak in the 2019 Price Review which will set limits on the prices that customers will pay for water between 2020 and 2025.

Yorkshire Water has announced its intention to reduce borrowing and simplify finances as part of a long term drive to enhance service for customers. The utility's offshore banking arrangements, which are used in the sector to manage high levels of borrowing, are to be wound up.