We set out in our 2019 price review (PR19) methodology that we expected company business plans to consider direct procurement for customers (DPC) where this was likely to deliver the greatest value for customers. DPC promotes innovation and resilience by allowing new participants to bring fresh ideas and approaches to the delivery of key projects. In chapter 7 and Appendix 9 of the PR19 final methodology we set out our approach and expectations for DPC in relation to company business plans.
In February 2020 we published our Consultation on proposed amendments to licence conditions for Direct Procurement for Customers. In that consultation we proposed a new condition for DPC and invited stakeholders to provide comments on the proposals made. We discuss feedback received to those proposals in Part B. However most water companies noted that DPC was a package and that it was difficult to understand the new condition without having sight of Ofwat’s proposals for amending the Interim Determination provisions of the licence and without further guidance on the Allowed Revenue Directions.
We accept the need to provide companies with greater clarity and we have included in this consultation updated proposals for amendments to the Interim Determination provisions and greater guidance on how we expect Allowed Revenue Directions to work.
Part B of this consultation summarises the comments made to our February consultation, and sets out how we have taken those comments into account.
Part C of this consultation deals with the proposal to amend the Interim Determination provisions.
Responding to this consultation
We are keen to hear your views on our proposed licence amendments in respect of direct procurement for customers, your views on the discussion points raised and whether you think there are other considerations we should take into account.
Please send your responses to [email protected] by 5pm, Monday 3rd September. You can also submit your response by post to: DPC Proposed Uncertainty Mechanism, Direct Procurement, Ofwat, Centre City Tower, 7 Hill Street, Birmingham B5 4UA.