Ofwat has today announced that it has modified the licences of 16 of the 17 water companies in England and Wales, who have accepted new ring-fencing provisions. One element of these changes is to protect customers by restricting pay-outs to shareholders if the company is in financial distress.
This package of changes has been consulted on widely, and represents improvements to the licences of companies to ensure that the financial ring-fence provisions ensure water companies remain financially robust and protect the interests of customers.
All water companies, except Wessex Water, have accepted these important safeguards and Ofwat is pleased that these protections have been adopted widely across the sector.
Rachel Fletcher, Chief Executive at Ofwat said:
“Today marks a positive step towards protecting customers’ interests and promoting financial resilience in water companies.
We have consulted extensively on these measures and are encouraged that all but one of the water companies have consented to these important changes. These provisions will help to promote financial resilience and stability and so protect customers and long-term shareholders alike.”
Notes to editors
- Conclusions on section 13 of the WIA91 on proposed modification to ring-fencing provisions
- Consultation under section 13 of the Water Industry Act 1991 on proposed modification to the largest undertakers’ licences for ring-fencing
- Thames Water: Conclusions on Change of Control and Modification of Instrument of Appointment
- Conclusions on strengthening the regulatory ring-fencing framework (original consultation)
- New conclusions document is available here