As part of Ofwat’s 2019 price review, all water companies must set out a detailed business plan outlining muti-billion pound investment plans for the AMP 7 spending period.
As well as what companies propose to invest, the plan includes what the public water companies propose to charge customers, and how they will ensure the long-term resilience of their infrastructure and operations.
This morning Thames Water set out its plan to spend a record £11.7bn on upgrades for the period 2020-2025, including £2.1bn plugging leaks.
Penon, covering South West Water and Bournemouth Water, plans to invest over £1bn in services.
United Utilities said its expects capital expenditure to run at around £450m a year, with a strong focus on improving water leakage.
Plans include delivering a major water resilience scheme with estimated construction costs of over £750m in AMP7 and AMP8 to be directly procured for customers in Manchester and the Pennines.
Ofwat will scrutinise all of the business plans with a focus on customer affordability before publishing an initial assessment of each company’s plan on 31 January 2019, where it will categorise companies’ plans according to the level of quality, ambition and innovation they have demonstrated.
The best plans could benefit from incentives through the price review process, while those that fall short will face closer scrutiny and interventions and could receive lower returns.
Ofwat will make final decisions on the services water companies must deliver and limits on the prices they can charge customers in December 2019.
Ofwat Senior Director for Strategy & Planning, John Russell, said: “We’ve reached a key milestone in our price review process.
“From now until January 2019, we’ll pore over each and every business plan and we’ll be looking for evidence that they are robust, ambitious and, crucially, that they have been shaped by customers.
All companies have had an opportunity to develop high-quality plans, but where plans aren’t sufficiently ambitious or stretching, we’ll step in to protect customers and the environment.”