How Will Ofwat's New Pricing Regulations Impact Water Companies?

April 2020 will saw the introduction of Ofwat’s new price regulations for the Water Industry in England and Wales, following Price Review 19 (PR19). PR19 builds upon the successful elements of the current framework and introduces tougher price controls, as well as placing a stronger emphasis on the management of void and gap sites.

So what does this framework look like? Ofwat’s enhanced outcome-based framework comprises of a set of service standards known as Performance Commitments (PCs) which are linked to Outcome Delivery Incentives (ODIs). The ODIs deliver penalties and rewards depending on whether agreed Performance Commitments (PCs) are met. The key message from Ofwat is that water companies should focus their resources to sustainably reduce the volume of void and gap sites in the next 5 years with a goal to convert them to identifiable billable customers.

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