Protecting customers where there are very material differences between companies’ re-submitted plans and Ofwat’s wholesale cost assessment. ‘Ofwat has written to Bristol Water, Thames Water and United Utilities to tell them that it is already clear that very material differences remain between their re-submitted plans and our assessment of efficient wholesale costs. The Thames tideway still causing problems. Ofwat We have published the information we sent to the companies concerned.
Ofwat ‘has today written to Bristol Water, Thames Water and United Utilities to inform them that it is already clear that, for individual price controls, very material differences remain between the companies’ re-submitted plans and our assessment of efficient wholesale costs. Relevant companies re-submitted their business plans on 27 June following our risk-based review. In their re-submitted plans, many companies included a number of claims for wholesale costs which they argued were not accounted for in our cost models. We have carefully assessed each of these claims on a consistent basis as part of our wider assessment of efficient costs. There are three companies where, for individual price controls, our current assessment suggests there will be a very material ‘gap’ between the expenditure sought by the companies and Ofwat’s view of efficient expenditure – well above 20%, and markedly above the gaps observed for other price controls. While our assessment of all companies’ plans is not final, and further refinement of our own modelling could result in changes, in Ofwat’s judgement this is unlikely to result in changes sufficient to address the scale of the gap for these price controls. As a result, we have decided to give those companies affected as much time as possible to review the relevant parts of their plans relating to these price controls ahead of the deadline for re-submitting
evidence for our final determinations in December 2014.’