In the first of a series of Expert Focus articles for WaterBriefing, John Lillistone Director of Water at Arqiva, global digital communications specialists for critical infrastructure, takes a look at how a move to outcomes-based contracting for smart metering can help water companies to reduce costs, streamline operations, enhance efficiency and help to foster innovation.

Thames Water has incurred a net £50 million penalty due to a mixed performance in its key operational metrics according to its annual results for 2021/21 published this morning – the company said it is “absolutely determined to learn from our mistakes and improve.”

Severn Trent Plc will have earned at least £163 million across AMP6 in net customer ODI outperformance payments according to its latest update for the period to 31 March 2020 published today.

Ofwat will today begin consulting on proposed outperformance and underperformance payments for four of the seventeen water companies in England and Wales, to be applied from April of next year.

The Consumer Council for Water has told MPs that the water sector regulator has been “overly generous” to water companies and “consumers have overpaid” - and criticised Ofwat for having become “increasingly reliant on water companies self-regulating.”

Thames Water has said its missed leakage targets stemmed from a decision in 2015 to develop an innovative delivery vehicle with its infrastructure partners to accelerate improvements which failed to deliver.

Thames Water has today agreed to pay £65 million back to customers as part of a package of payments and penalties worth £120 million in total.

Severn Trent is planning to invest an extra £100 million to improve its water business performance in preparation for AMP7, according the preliminary announcement of its annual results published this morning.

Severn Trent Water is calling for Ofwat to explore the scope for increasing the scale of Outcome Delivery Incentives (ODIs) in the 2019 Price Review, the possibility of a variable WACC, potential together with the potential reintroduction of “output type incentives” to address longer term challenges like resilience.

Water industry regulator Ofwat is progressing its approach to a number of key issues for the upcoming Price Review 2019 for the water companies’ AMP7 2020-2025 investment programmes.