2019 price review: Final methodology

Water is vital for life – not just for people but for the environment and ecosystem on which we depend. This means that customers in England and Wales feel differently about water to other services: they need to trust that water and wastewater companies are serving the public benefit.

At the same time, customers expect great service, at least comparable to the service they get elsewhere. They expect water and wastewater services to be resilient to both short-term shocks and long-term challenges such as population growth and climate change. And they expect those services to be affordable for all, including those struggling to pay.

The only way water companies will achieve all this, is to find new and better ways of delivering those services. Our 2019 price review enables, incentivises and encourages water companies to achieve exactly that, so that customers will get more of what really matters to them.

On 13 December we published Delivering W2020: Our final methodology for the 2019 price review.

PR19 is part of Water 2020, our overall vision for the water sector in England and Wales, where customers and wider society have trust and confidence in water.

Great customer service

Resilience in the round

Affordable bills

Innovation

Documents

Q&As

PR19 final methodology queries and answers - 15 January 2018

Summaries

Ofwat’s price review: delivering more of what matters. Our final methodology for the 2019 price review – executive summary

UK Government priorities and our 2019 price review final methodology

Welsh Government priorities and our 2019 price review final methodology

Appendices

Appendix 1: Addressing affordability and vulnerability

Appendix 2: Delivering outcomes for customers

Appendix 3: Customer measure of experience (C-MeX) and developer services measure of experience (D-MeX)

Appendix 4: Resilience

Appendix 5: Water resources control

Appendix 6: Bioresources control

Appendix 7: Network plus water and wastewater controls 

Appendix 8: Company bid assessment framework – the principles

Appendix 9: Direct procurement for customers

Appendix 10: Assessment of the duration of retail controls and measures for the appropriate management of voids and gap sites

Appendix 11: Securing cost efficiency

Appendix 12: Aligning risk and return

Appendix 13: Initial assessment of business plans

Appendix 14: Approach to impact assessment

Appendix 15: Responses to our draft methodology

Feeder models

The following are spreadsheets (xlsx). If you have difficulties opening them directly, try choosing ‘save as’ and saving them to a suitable file location

RCV adjustments feeder model - updated December 2017

Revenue adjustments feeder model - updated December 2017

Balance sheet feeder model

Other models

The following are spreadsheets (xlsx). If you have difficulties opening them directly, try choosing ‘save as’ and saving them to a suitable file location

RPI-CPIH wedge reconciliation model

New cost of debt reconciliation model

RCV indexation illustrative model

Cost sharing rates spreadsheet

Business plan data tables

Business plan data tables - guidance

The following are spreadsheets (xlsx). If you have difficulties opening them directly, try choosing ‘save as’ and saving them to a suitable file location

Business plan data tables

Data tables issues log

Initial assessment of business plans pro forma

Financial model

The following are spreadsheets (xlsx). If you have difficulties opening them directly, try choosing ‘save as’ and saving them to a suitable file location

Financial model and rulebook

Business plan table - Financial model mapping tool 

Independent reports

Reckon: Water resources annualised cost model

Reckon: Water resources annualised cost model - explanatory note

Deloitte tax letter

Direct procurement for customers: technical review. A KPMG report for Ofwat

Europe Economics: PR19 - Initial assessment of the cost of capital

PWC: Updated analysis on the cost of equity for PR19 

Other useful documents

Customer engagement policy statement (May 2016)

Driving Innovation in Water

Driving Innovation in Water (pdf version)

Outcomes definitions