This document is a consultation on how we will apply some detailed aspects of the Revenue Forecasting Incentive in the period 2025-2030.
The Revenue Forecasting Incentive mechanism incentivises water and wastewater companies to accurately collect revenues and to adjust their charges to customers to account for any under or over recovery of revenue in a previous year. It applies a small but meaningful penalty on companies for each year where it has either over or under recovered revenue outside of a set level of tolerance (for example in recent years penalties have been in the region of £5m annually across all companies).
In this document we set out our position on what that level of tolerance should be and the rate at which we intend to apply the penalty. We also seek views on some of the detailed rules around the application of the mechanism.
We would welcome any comments on this consultation. Please email your responses to [email protected]. The closing date for this consultation is Tuesday 12 September 2023.