We use data models to calculate water companies’ price controls – and certain information we need in order to set those controls.
To perform the reconciliations of the 2014 price review incentive mechanisms, operating for companies during 2015-20, we use a past delivery modelling suite.
Our PR19 final determination suite of models published in December 2019 included companies’ forecast performance for 2019-20. For the blind year reconciliation, we have updated relevant past delivery models to take account of companies’ actual performance in 2019-20 as reported in their annual performance reports in July 2020. For each company we publish the following updated past delivery models:
- Totex reconciliation model
- Wholesale Revenue Forecasting Incentive Mechanism model
- Residential (household) retail model
- Land sales model
- RCV adjustments feeder model
- Revenue adjustments feeder model
We also publish a water trading model for Northumbrian Water, Thames Water and Portsmouth Water, an aggregation model for South West Water and an enforcement model for Southern Water.
For the blind year reconciliation, we have also used new models to calculate both the blind year adjustments and the impact on the price limits we set in December 2019, arising from the variation between forecast and actual performance in 2019-20. For each company we also publish:
- a PR19 BY ODI difference model
- an in-period adjustment model
- a blind year adjustments model
The blind year revenue adjustments will apply 2021-22 across the remaining years of 2020-25 price controls. The blind year Regulatory Capital Value (RCV) adjustments and retail revenue adjustments will apply from 2025.