Water 2020: our regulatory approach for water and wastewater services in England and Wales

Our shared vision for the water sector in England and Wales is one where customers and wider society have trust and confidence in vital public water and wastewater services. Delivering this vision relies on everyone in the sector working together, listening to customers and tackling long-term challenges.

We are making changes to the way we regulate in future to play our part in building trust in water. Our future regulatory approach for wholesale markets and the price review in 2019 (PR19) and beyond will build on the successes of our previous price review (PR14) and go further, for the benefit of customers, the environment and wider society.

What our approach will deliver

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Summary in English and Welsh

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Supporting information

Questions for discussion

We have set out specific areas for further consultation about the role of markets and the regulatory framework for the 2019 price review.

Focusing on current and future customers
Consultation questions: outcomes

Q1 What are your views on our preferred approach to long-term commitments?

Moving beyond waste
Consultation questions: price control for sludge

Q1 Do you agree that sludge holding tanks with only passive thickening should be network plus assets?

Q2 a) Do you agree that sludge liquor treatment costs should be charged on the basis of a modified Mogden formula which includes a factor for ammonia concentration?

Q2 b) Do you agree that these liquor treatment charges should be calculated on a company average basis, as they are currently for trade effluent charges?

Q3 Do you agree that tonnes of dry solids should be used as the units on which to set the average revenue control for sludge?

Tackling water scarcity
Consultation questions: risk in post-2020 water resource investment

Q1 On our judgement, demand and utilisation risks relating to bilateral market entry should be allocated to incumbent water companies rather than customers, subject to our policy to protect the pre-2020 RCV. Do you agree that the water resources price control framework should differentiate between utilisation risks relating to market-wide demand and utilisation risk relating to bilateral market entry?

Q2 Do you agree that the price control arrangements for increases in water resources capacity should, at least in some circumstances, expose an incumbent water company to some degree of market-wide demand risk? If so, what circumstances?

Targeting regulation for networks
Consultation questions: network plus scope of control

Q1 Which of the options described in Section 7.3.5 (and/or which other options) should be used to treat developer services in the network plus total revenues? Please explain your reasoning. Please identify which services you think should fall within the generic term ‘developer services’ in the context of your answer.

Q2 Are there any other wholesale activities that should be excluded from the scope of the network plus price controls? If so, what are they and what problems would be resolved by excluding them?

Q3 Are there any costs that require clarification as to whether or not they should fall within the network plus price controls?

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We intend to publish all written responses that we receive on our website by the autumn.

We will use these written responses to contribute to the development of our policy. With the exception of the area of outcomes, we will next provide a written consultation for the methodology for PR19 in 2017. We expect that, by this time, the ongoing sector conversation on Water 2020 will have progressed and we do not anticipate providing a formal response on the written input we receive.