CMA issues final decision on water price controls

In December 2019, Ofwat published its price controls setting out the total amount water companies can charge for services in 2020-25. In March 2020, Anglian, Bristol, Northumbrian and Yorkshire asked the Competition and Markets Authority (CMA) to redetermine their price controls.

The CMA’s role is set out by law and requires it to appoint an independent Special Reference Group to conduct a redetermination of the price controls. The Group has to promote the interests of consumers, consider the long-term resilience of water infrastructure, and ensure financeability of the water companies. This means the Group must provide the 4 water companies with enough money for them to cover their current running costs and pay for improvements for the future, including by providing investors with a reasonable rate of return.

In coming to its conclusion, the independent Group examined all of the evidence provided by Ofwat, the water companies and a range of third parties, including new information that was not available to Ofwat when it made its decision in December 2019. The Group consulted widely throughout the process, including through the publication of provisional findings and working papers.

For more information, please see the full Press Release