Ofwat is today confirming the financial penalties and payments
for all water companies for the 2022-23 year, with the majority
of companies having to return money to customers.
The determinations also include funding for the green recovery
programme.
Thames Water will return the most to customers, with a final
determination of £73.8m.
The final determination follows on from the announcement of draft
decisions in September, the consultation for which closed on 18
October 2023.
ENDS
Notes to editors
- The links to the final decisions can be found on the
Ofwat website.
- For some companies the final revenue adjustment that will be
applied to 2024-25 can differ from the reported outcome delivery
incentive (ODI) payments for the year because other adjustments
may be included. For example, Severn Trent's revenue adjustment
includes additional funding for Green Recovery investment, and
the recovery of deferred outcome delivery incentive payments from
previous years.
- There are some changes for specific companies from the draft
decisions.
-
- The amount being returned to customers by Southern Water
accounts for an additional £21m which will be deferred to
2025-26
- We adjust the size of water companies' net ODI payments
to reflect their marginal rate of corporation tax. This
ensures that companies receive the level of ODI payments as
envisaged in the PR19 final determinations, which maintains
the degree of financial incentive intended by PR19. If we did
not do this, the financial incentives PR19 intended for
companies would be weakened. A 0% tax rate has been applied
to Thames Water and Anglian Water, after adjusting for the
funding those companies received at PR19 (when it was assumed
that they would pay some tax during 2020-25) to ensure
fairness to customers. This change is based on additional
evidence submitted by the companies, including substantive
detail on their tax losses, as well as the benefits of 'bill
smoothing' measures.
- We carry out in depth analysis of water company performance
through publications such as our Water Company Performance Report
and Monitoring Financial Resilience report.
- Our 2019 price control determinations set the price and
service packages that companies have to deliver through to 2025.
The ODIs are the financial or reputational consequences for
companies of outperformance or underperformance against their
performance commitments. Performance against the majority of
performance commitments is reviewed annually so the financial
consequences happen close in time to company performance and
customer experience. The payments will affect the amount of
revenue companies can recover from customers through their
2024-25 bills.
|
Company
|
Ofwat FD payments including C-Mex and D-Mex (£m)
|
ODI payments deferred from 2021-22, or to 2025-26 (£m)
|
Green economic recovery (£m)
|
Other adjustments (£m)
|
Final determination on total ODI payments to be applied
to customer bills in 2024-25 (£m)
|
|
Affinity Water
|
-8.088
|
0
|
0
|
0
|
-8.088
|
|
Anglian Water
|
-22.362
|
0
|
0
|
-4.822
|
-27.185
|
|
Dŵr Cymru
|
-18.314
|
0
|
0
|
-5.766
|
-24.080
|
|
Hafren Dyfrdwy
|
-0.401
|
0
|
0
|
-0.085
|
-0.486
|
|
Northumbrian Water
|
-0.113
|
0
|
0
|
0
|
-0.113
|
|
Portsmouth Water
|
-0.042
|
0.343
|
0
|
0
|
0.302
|
|
SES Water
|
-1.123
|
0
|
0
|
0
|
-1.123
|
|
Severn Trent Water
|
26.983
|
31.594
|
30.129
|
-0.009
|
88.698
|
|
South East Water
|
-5.188
|
0
|
0
|
0
|
-5.188
|
|
South Staffs Water
|
0.328
|
0
|
0.756
|
-0.216
|
0.869
|
|
South West Water (South West area)
|
-9.244
|
0
|
0
|
0
|
-9.244
|
|
South West Water (Bristol area)
|
-2.573
|
0
|
0
|
0
|
-2.573
|
|
Southern Water
|
-42.903
|
21.451
|
0
|
0
|
-21.451
|
|
Thames Water
|
-100.719
|
0
|
0
|
26.953
|
-73.766
|
|
United Utilities
|
25.284
|
0
|
0
|
-0.055
|
25.229
|
|
Wessex Water
|
0.718
|
7.242
|
0
|
0
|
7.960
|
|
Yorkshire Water
|
-19.830
|
0
|
0
|
0.005
|
-19.825
|
|
Industry total
|
-177.588
|
60.630
|
30.885
|
16.006
|
-70.066
|
