The Competition and Markets Authority (CMA) is inviting comments by 11 May 2020 on the appeals from four water companies who rejected Ofwat’s 2019 Price Review Final Determinations on their business plans for the period 1 April 2020 to 31 March 2025.
The Competition and Markets Authority (CMA) is inviting comments by 11 May 2020 on the appeals from four water companies who rejected Ofwat’s 2019 Price Review Final Determinations on their business plans for the period 1 April 2020 to 31 March 2025.
Anglian Water, Bristol Water, Northumbrian Water and Yorkshire Water all asked Ofwat to refer the disputed final determinations to the CMA for a redetermination.
The CMA’s role is to form its own conclusion on the price controls for the individual companies that appeal. When carrying out the review, the CMA has the same duties as Ofwat.
The authority has appointed an Inquiry Group of independent panel members chaired by Kip Meek,to review Ofwat’s price determination decision, supported by a team of staff within the CMA.
The CMA is now inviting submissions from interested parties, including # customers and representative groups and other water companies. Submissions can still be made after 11 May, but the Authority says earlier submissions will help in scoping its work and will provide an opportunity for any further engagement that may be necessary in relation to the issues raised.
The 6 month period which usually applies from the date of the reference to the CMA complete its review has been extended by Ofwat for a further 6 months in the light of the ongoing Covid-19 emergency.
At the end of March the water sector regulator kickstarted its approach to the appeals with a robust defence of the Price Review process, the work of the regulator and how it arrived at its FD decisions.
Ofwat said it had been “transparent, thorough and…listened” in conducting the Price Review and that while thirteen companies had accepted the challenge, four had not, commenting:
“Despite our detailed analysis of operational best practice and historic performance, our scrutiny of business plans and evidence of returns in capital markets, it seems four companies believe customers should pay more and receive less.”
Kip Meek, CMA Inquiry Group Chair said the CMA would look closely at whether Ofwat’s decision strikes the right balance in this and other areas and will make changes if not.
At the end of the review, the CMA will publish a report with its final decision on Ofwat’s price controls including any changes that it deems necessary.
Submissions should be sent to the CMA via email at:
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