PN 13/16: Ofwat publish PR 16 draft determinations


Ofwat has today (15 September) published its draft determinations for the PR16 price review, as part of the preparation for the opening of the business, public and charity sector retail water market in April 2017.

The price review builds on the price caps set as part of our last price review in 2014 (PR14) and limits the prices companies can charge business customers on existing tariffs when the retail market opens for competition next year.

In submissions to the review, most companies suggested limited, cost-neutral rebalancing of their existing tariffs for business customers, with the impact on prices generally less than 1%.

Ofwat’s intention to revisit the price caps ahead of the opening of the business market was announced in PR14, to ensure they reflect the most up-to-date information on company costs.

In considering the company representations on costs, Ofwat has set a high bar for evidence and called on a number of companies to revisit the submissions they have made. Water companies, and other stakeholders, will have the opportunity to make further representations by 28th October. Ofwat will publish the final determinations in December 2016.

Cathryn Ross, Ofwat Chief Executive, said:

“This price review establishes a backstop to limit prices within existing tariffs for business customers once the market opens to competition. In a vibrant market, we will see retailers make attractive offers to win and retain customers and we will see customers voting with their feet. But it is prudent, especially in the early days of the market, to establish some safeguards to protect business customers.”

The new price controls will come into force upon the opening of the market in April 2017.


Notes to editor

For more on the opening of the water retail market for business, public and charity sectors, please visit