With water companies working on delivering the stretching targets of the 2019 price review, Ofwat shared its first discussion paper about PR24 in December 2020. In May 2021, it published its ideas and ambitions for PR24 in PR24 and beyond: Creating tomorrow, together.
During the investor roundtable, three Ofwat directors outlined the four focus areas of PR24:
Protecting and improving the environment in the context of climate change,
Achieving public confidence and affordability in the face of cost pressures,
Innovating and collaborating to transform performance for customers, and
Anticipating and adapting to uncertainty and change – before introducing the participants to the regulator’s risk and return discussion paper and the financial resilience discussion paper.
With their risk and return paper, Ofwat aims to align the interests of companies and investors with those of customers, so that the sector also remains attractive to investors.
Meanwhile, and importantly for companies and their stakeholders, the financial resilience discussion paper sets out several options from Ofwat to strengthen the licence and other protections with the aim of bolstering and better measuring financial resilience. Interested parties have now responded to these consultations, the debate continues.
If you are an investor or a water company and want to discuss how PR24 could affect you, please contact Peter Dooley.