Northumbrian Water and Yorkshire Water have published their initial responses to reaction to the Competition and Markets Authority (CMA) Provisional Findings on their appeals against Ofwat’s PR19 Final Determinations.

In response to the CMA Provisional Findings on Ofwat’s PR19 Final Determination, Chief Executive of NWL, Heidi Mottram CBE commented:

“In developing our business plan for the PR19 price review, we extensively consulted with almost half a million of our customers in order to understand their priorities clearly. Our customers’ key priorities were efficient costs and assurance that water and waste water services would be robust, deliverable and resilient for the future.

“Following detailed review of the PR19 Final Determination that Ofwat set for NWL, the company firmly concluded that firstly it fell short of what customers clearly stated were their priorities and secondly it would adversely impact the long term financial resilience of the company. For these reasons the Board of NWL unanimously agreed to seek the only redress it has available in the regulatory process, an independent review by the CMA.

“We will be studying the detail in the CMA’s provisional findings over the coming weeks and will prepare a full response in due course.

“We appreciate the thorough and diligent approach the CMA has taken to make the process to this point fair and comprehensive given the difficult circumstances of Covid-19.”

Yorkshire Water said the findings were a comprehensive review by the CMA of Ofwat’s final determination and extend to over 700 pages in total. The company has commenced a thorough review of the provisional findings and will respond to the CMA within the four-week deadline.

“This decision signals a significant move in regulatory approach”

Commenting on the CMA’s provisional determinations, Yorkshire Water CEO Liz Barber said:

“Our challenge was about protecting the long-term resilience of Yorkshire and ensuring that the cost of vital infrastructure investment was not pushed on to future generations. We wanted to ensure that the next price review in 2024 struck the right balance between investment and price and did not make the mistakes of PR19.

“The CMA has recognised that the needs of current and future customers are best served by encouraging investment in infrastructure to mitigate the impact of climate change.

“This decision signals a significant move in regulatory approach which is to be welcomed. We are seeing some promising early signs that Ofwat recognises that PR24 needs to be very different and we look forward to working with both government and regulators to create a more sustainable system.”

It is expected an update will be provided following submission of Yorkshire Water’s response to the CMA, no later than the reporting of the company’s interim results at the end of November.