6th Aug 2014 06:49
LONDON (Alliance News) - Water industry regulator Ofwat on Wednesday wrote to United Utilities Group PLC, Bristol Water and Thames Water Utilities Ltd to inform the companies their re-submitted plans on individual price controls still contain "very material differences" against its assessment on efficient wholesale costs.
The watchdog said its concerns centre on United Utilities' wholesale wastewater price control, the future planned expenditures on the wholesale water price control plans at Bristol Water, and the proposed separate price control for Thames Water's Thames Tideway Tunnel project.
Ofwat said that on all of the price controls cited, it remains clear there is a more than 20% price difference between the plans outlined by the companies and the level of costs the regulator considers to be efficient based on cost modelling and the evidence provided by the companies.
For United Utilities, the current gap stands at GBP760 million, or a 29% gap against Ofwat's calculations. For Bristol Water, the gap is GBP203 million, or 57%, and for Thames Water the gap is GBP331 million, or 102%.
United Utilities resubmitted its business plan for the 2015-2020 period to Ofwat in June, following the regulator having said its risk and reward proposals were not in line with its expectations.
Ofwat said the publication of the gaps was designed to provide the companies with an opportunity to reconsider their current proposals or provide new evidence to Ofwat that the costs they are putting forward are efficient.
By Sam Unsted; [email protected]; @SamUAtAlliance
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