Creating tomorrow, together: consulting on our methodology for PR24

About Consultation

This document consults on our proposals for how we will carry out the 2024 price review (PR24). The methodology will be used to set the revenues for water companies as well as the outcomes that they will need to deliver during the period from 2025 to 2030. We are seeking views from stakeholders on our expectations and requirements. This will help us finalise our methodology, which is a key milestone in our preparations for PR24.

We would welcome any comments on this document. Please email them to [email protected] or post them to:

PR24 draft methodology consultation response
Ofwat
Centre City Tower
7 Hill Street
Birmingham B5 4UA

The closing date for this consultation is 5pm Wednesday 7 September 2022.

We published our Final Methodology on Tuesday 13 December – all relevant documents are available here.

Summaries

Creating tomorrow, together: an overview of our consultation on the methodology for PR24

• Creu yfory, gyda’n gilydd: trosolwg o’n hymgynghoriad ar y fethodoleg ar gyfer PR24

Delivering UK government priorities for the English water sector through our 2024 price review draft methodology

Delivering Welsh Government priorities for the Welsh water sector through our 2024 price review draft methodology

• Cyflawni blaenoriaethau Llywodraeth Cymru ar gyfer sector dŵr Cymru drwy ein methodoleg draft ar gyfer adolygiad pris 2024

Appendices

• Appendix 1 – Affordability
• Appendix 2 – Water trading incentive
• Appendix 3 – Developer services
• Appendix 4 – Bioresources control
• Appendix 5 – Direct procurement for customers
• Appendix 6 – Performance commitments
• Appendix 7 – Performance commitment definitions
• Appendix 8 – Outcome delivery incentives
• Appendix 9 – Setting expenditure allowances
• Appendix 10 – Aligning risk and return
• Appendix 11 – Allowed return on capital
• Appendix 12 – Business plan incentives
• Appendix 13 – Data and modelling

Data tables

• PR24 submission tables
• PR24 submission table guidance – section 1: Outcomes
• PR24 submission table guidance – section 2: Risk & return
• PR24 submission table guidance – section 3: Costs (wholesale) – water
• PR24 submission table guidance – section 4: Costs (wholesale) – wastewater
• PR24 submission table guidance – section 5: Water resources
• PR24 submission table guidance – section 6: Bioresources
• PR24 submission table guidance – section 7: Retail
• PR24 submission table guidance – section 8: Developer services
• PR24 submission table guidance – section 9: Long-term strategies
• PR24 submission table guidance – section 10: Supplementary tables
• PR24 submission table guidance – section 11: Summary tables
• PR24 submission table guidance – section 12: Past delivery

Financial models

• PR24 draft financial model (excel file)
• PR24 draft financial model (Openbox file)
• PR24 draft financial model user guide

Bioresources control

• Supplementary document and associated files

City Briefing – 7 July 2022

• Presentation and Q&A
• Transcript
• Presentation slides

Other documents

• PR24 draft methodology response template
• PR24 draft methodology glossary
• Model suite diagram
• Frontier Economics, ‘Incentivising Net Zero – a report for Ofwat’
• PwC, ‘Methodologies for measuring outcome delivery incentive risk’
• Net Zero Technology Review