We are pleased to announce that we have published our “Draft Business Plan for 2020-2025 which will keep our bills the lowest in England and Wales.
Our plan has been submitted to Ofwat, the economic regulator, who will consider our proposals and are expected to announce the outcome to their assessment by the end of January 2019.
Our Plan has been developed after extensive consultation with our customers and we believe it will allow us to build on our already excellent record of service aligned with the lowest water bills in England and Wales.
In the plan we propose to reduce our bills from 2020 to an average of £97 per year, whilst still further enhancing our service to customers, looking after our vulnerable customers and protecting the environment.
The plan includes ambitious targets in leakage reduction as well as a long term aspiration of reducing water use to 100 litres per person per day (currently at 144 litres). By helping customers use less water we will all help lessen the impact on the environment.
An exciting part of our plan is a new major water resource for the South East – a reservoir at Havant Thicket. This reservoir will help us share our other water resources with other water companies and increase the reliability of our customer supplies.
The Business Plan is supported by almost 100 appendices, which are referred to in our main document. If you wish to see any of these, please contact [email protected].
Our Response to Ofwat’s Initial Assessment
Ofwat’s initial assessment of our Business Plan for 2020 – 2025 can be viewed here (https://www.ofwat.gov.uk/regulated-companies/price-review/2019-price-review/initial-assessment-of-plans/).
The documents below detail our response to Ofwat’s assessment.
Our Response to Ofwat’s Draft Determination
Ofwat’s draft determination of our Business Plan for 2020 – 2025 can be viewed here.
The documents below detail our response to Ofwat’s Determination.
Final Determination
Following careful consideration of the Final Determination for Portsmouth Water, published on 16 December 2019, our Board has decided not to ask Ofwat to refer the determination to the Competition and Markets Authority. See document below.
Cost of Debt report by NERA
Portsmouth Water commissioned NERA Economic Consulting (NERA) to review Ofwat’s consultation on setting the cost of debt allowance for the 2019 price review.
In particular, the company asked for a review Ofwat’s proposed approach to compensating for embedded debt costs which – based on the industry average embedded debt costs –may not compensate Portsmouth Water for its atypical and efficiently incurred embedded debt. In this report, it is concluded that Portsmouth Water’s embedded cost of debt allowance should be set with reference to a market benchmark value at the time of issuance, in common with the approach of UK regulators for companies with atypical debt profiles.