17th Mar 2014 10:16
LONDON (Alliance News) - Pennon Group PLC Monday said its water arm South West Water has accepted Ofwat's risk and reward guidance as part of the next regulatory price review.
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 asked 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.
Pennon on Monday said South West Water has now submitted an updated business plan to the water regulator reflecting these principles and awaits Ofwat's confirmation on April 4 that these new proposals have been accepted.
Affinity Water, owned by Morgan Stanley and M&G Investments, has also accepted the guidance Monday.
Pennon was trading at 780.00 pence Monday, up 14.50 pence or 1.9%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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