Yorkshire Water rejects Ofwat’s price determination and seeks CMA appeal

Last December, the regulator said water companies across England and Wales must cut their bills by 12% before 2025

Big Zero Report 2022

Yorkshire Water has rejected Ofwat’s final determination as part of its 2019 price review and instead asked the regulator to refer it to the Competition and Markets Authority (CMA).

Last December, Ofwat said water companies across England and Wales must cut their bills by 12% before 2025, which would reduce household water bills by £50 annually on average.

Under Ofwat’s final determination, Yorkshire Water can invest £905 million in improvements to service, resilience and the environment and is required to reduce leakage by 15% on a three-year average basis and pollution incidents by 41% by 2024/25.

Thew water company said “significant work” has been undertaken to establish the deliverability of the final determination and concluded “the long term risks to its resilience and customers would be at a level which it cannot accept”.

It added the overall approach to the determination means the company would be “forced to focus on short term performance at the expense of longer term capital investment”.

Liz Barber, Chief Executive of Yorkshire Water said: “Everyone at Yorkshire Water shares a common purpose to provide safe and reliable services to our customers and our county, long into the future. We’re naturally committed to being the most efficient company we can but have decided that accepting this determination would jeopardise Yorkshire’s resilience and our own.”

Ofwat said during its recent price review, the regulator challenged all water companies with a demanding set of ambitions and targets.

A spokesperson added: “It is the greenest price review ever and will deliver improvements to customer services and lower bills, while securing long-term resilience. We also set out measures which mean companies are rewarded only if they deliver for customers.

“This is a new and stretching approach that some water companies may want to challenge. There is a well-established process for them to do so. We are ready to fully engage with CMA process, setting out our analysis and why we are confident this is the right settlement for customers, the environment and the company.”

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