Northumbrian Water has today announced it has asked Ofwat to refer its PR24 Final Determination to the Competition and Markets Authority (CMA).

The Board of Northumbrian Water Limited has reached a unanimous decision to seek an independent redetermination of its Ofwat PR24 Final Determination by the CMA.

The company has concluded that the Final Determination does not provide NWL with the necessary means for the successful delivery of its business plan for 2025-2030, which would provide required investment in the long-term resilience of services.

A statement issued by the company said that its PR24 business plan – which was judged to be of a ‘high quality’ by Ofwat – was informed by extensive consultation with customers, with a clear majority of 74% indicating that they supported it.

“We designed our plan to be ambitious and stretching, proposing a much-needed step-change in investment to deliver high-quality water and wastewater services, restore ageing assets, and ensure resilience for the long-term in the face of more extreme weather conditions,.

“We also heard a clear message from our customers that the plan must be mindful of the ongoing cost of living challenges they are facing. That is why our plan retained a strong focus on efficient management of costs.”

The final Business Plan the water company submitted combined NWL’s largest investment programme ever, with the lowest price rises across the country, resulting in the lowest bills, together with a four-fold increase in support for customers facing cost of living challenges.

The statement says:

“However, despite our repeated representations following the Draft Determination, Ofwat has arrived at a Final Determination for NWL that strikes the wrong balance between the need for investment and the pressure on bills. In rejecting NWL’s request for £160m on asset health investment, the FD represents a misjudgement in the minimum amount of funding needed to adequately ensure the resilience of our assets….

“While we are mindful of any impact on customers in this challenging economic environment, accepting the FD would carry the unacceptable risk of us being unable to deliver the outcomes our customers have told us they want in this AMP and beyond.”

Commenting on the decision to appeal, Chief Executive Officer, Heidi Mottram CBE said:

“NWL is proud to have been recognised amongst the highest-performing and most efficient companies in delivering for our customers and protecting the environment.

“Ofwat has consistently underestimated the impact of climate change on our customers’ services, resulting in widespread under funding in its final determinations in 2019 and now again in 2024.

“With the prospect of another five years of customer services being negatively impacted by ageing water infrastructure, NWL is seeking a redetermination of our 2024 Business Plan by the Competition and Markets Authority. This is the only option we have left to us to ensure we have the means to appropriately invest in the health and resilience of our assets.

“Following an independent review by the CMA, we believe our appeal will result in a redetermination which allows us to implement our investment plans in full. In the meantime, we will continue to make investments to tackle the most pressing issues raised by our customers, such as reducing the operation of storm overflows.”