25 May 2023
We have opened an enforcement case into the accuracy of leakage and PCC performance figures Welsh Water has reported to Ofwat as part of its annual regulatory reporting for the periods 2020-21 and 2021-22. This comes after Welsh Water notified Ofwat that it had identified issues with its leakage and PCC performance calculations for those periods as part of its Annual Performance Report assurance process.
Companies have outcome delivery incentives linked to their leakage performance as part of their price controls, receiving outperformance payments for exceeding targets and incurring underperformance payments where they miss their targets. Following Welsh Water alerting Ofwat on the issues it had identified, in November 2022 Ofwat deferred its decision on outcome delivery incentives linked to the company’s leakage performance commitment, until it was provided with accurate data for the periods concerned.
Ofwat’s investigation will consider Welsh Water’s restated performance figures, what led to the company reporting inaccurate performance, and what steps it has taken or is taking to address these failings. Welsh Water is already considering how it might remedy the matter with its customers. Ofwat will consider any remedial plans as part of its investigation, and its decision on whether Ofwat needs to take any further action on the matter.
Section 18 of the Water Industry Act 1991
25 May 2023
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