Ofwat allows Severn Trent to focus on key critical issues in price review
A proposal by Severn Trent Water to limit its response to the draft determinations to just a handful of critical issues has been accepted by Ofwat. Severn Trent chief executive Liv Garfield outlined the proposal in a letter to Ofwat on September 19, saying that focusing the company's representations on a small number of material issues to Severn Trent "allows sufficient air time for our critical issues".
In the letter, Garfield said: "We appreciate that Ofwat has all 14 'slow track' DOs to complete in only a matter of weeks, and there remains a number of significant issues to be finalised, during the final stage of the price review process."
The key issues Severn Trent will focus on include:
- The Elan Valley Aqueduct (EVA): Birmingham resilience, where Severn Trent has undertaken additional work required by Ofwat in the DD to justify the inclusion of the revised cost of the scheme
- The EVA: community risk schemes
- WACC and financing
- Water maintenance non-infrastructure expenditure
Garfield highlighted a number of areas that Severn Trent could have challenged the draft determination. However, she said: "We believe the approach of challenging on such a wide range of issues would potentially undermine the constructive dialogue we have both sought to maintain to date, and as such we would like to proceed on the basis of not challenging on all these areas and instead focusing on the critical issues. This is an approach that we believe demonstrates our commitment to making representations on a small number of critical aspects and frees up time for both sides to delve into them in detail."
Ofwat portfolio director Giles Stevens, replying to Garfield's letter, said the regulator welcomed the "overall approach of focused representations".
He said: This will help make the most effective use of resources for both teams and deliver the best outcome for customers. Accordingly, we would welcome any representations you may make in these areas.
"However, I should point out that there are no guarantees associated with the outcome of our assessment."
- Firm fined for illegal discharge into Severn Trent sewer network JP Metal Treatments, of Walsall, has been fined £4,000 for making illegal discharges into the Severn Trent Water sewer... Read More >
- Ofwat postpones new connection charging rules Ofwat has postponed the implementation of the new charging rules for new connection services provided by English water... Read More >
- Severn Trent restores service after chlorine alert Severn Trent has resolved an issue which saw thousands of customers in Derbyshire and Leicestershire told not to use their... Read More >
- Comment: Sludge all set for reform The opening of the bioresources market presents water companies with an opportunity to do things differently, but what... Read More >
- Interview: Ben Jeffs, Chief Executive, MOSL “The whole industry has really mobilised around market opening, and the water companies deserve credit for that.” Read More >
- Close-Up: Who will be the big fish in the new water retail market? With a £2.5BN new market for non-domestic water retail to open in England in April, joint ventures, incumbents and new... Read More >
- Water Industry Procurement: could Brexit provide a fresh start? Could Brexit lead to a re-examination of the procurement rules which govern the water industry and other infrastructure... Read More >
- Industry View: Let's not drop the ball after PR19 There must be better alignment between PR19 strategic plans and actual delivery plans if water companies are to get full... Read More >