10th Mar 2014 10:16
LONDON (Alliance News) - UK water regulator Ofwat said South West Water, owned by Pennon Group PLC, has qualified for a fast-track passage through its 2014 price review for the next regulatory period.
Earlier this year Ofwat said it will "pre-qualify" water companies that have outstanding business plans for the period 2015 to 2020, meaning plans that pass its tests for outcomes, cost and affordability, and board assurance.
UK water companies submitted business plans at the end of 2013 setting out their proposed investments plans for the next five years and how much they plan to charge customers
At the end of the process, Ofwat marked the plans as either enhanced, standard or resubmission. Companies that pre-qualify can then choose to adopt Ofwat's risk and reward guidance, which will enable them to benefit from a fast-track approval process.
Ofwat said it is now asking South West Water and Affinity Water Ltd - which also qualified for fast-track - to accept its risk and reward, including the cost of capital, which was published in January.
"If South West Water and Affinity Water accept the guidance and undertake a number of other limited actions, they will gain the advantages of enhanced status - including a fast-track through the price review process - benefiting both the companies and their customers," Ofwat said.
Ofwat Chief Regulation Officer Sonia Brown said the plans submitted by South West Water and Affinity Water "stand out".
"These companies have achieved plans of particularly high quality, with a consistent focus on listening and responding to what their customers want," Brown added. "We look forward to continuing a constructive dialogue with all companies, so that they can demonstrate that their plans deliver the best possible outcome for customers."
Affinity Water is owned by Morgan Stanley and M&G Investments.
Pennon Group shares were trading at 759.06 pence Monday, up 23.06 pence or 3.1%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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