Fast-track price determination a credit positive for Affinity, says Moody's
Ofwat's decision to pre-qualify Affinity Water and South West Water (SWW) for a fast-tracked price determination will be credit positive for Affinity, according to Moody's Investors Service in its latest sector comment on UK water companies.
Moody's said that if Affinity accepts Ofwat's return guidance and is fast-tracked, it will not only receive an early draft determination it will also earn an initial financial reward, amounting to around 0.4% of its average regulatory capital value (RCV) over the next regulatory period. There will also be enhanced incentives for future outperformance compared with companies that will not be fast-tracked.
Apart from Affinity and SWW, all other UK water companies have to re-submit their plans along with further evidence that these are in customers' best interest. The companies will remain subject to additional regulatory scrutiny, and will not receive the financial reward nor the higher incentive payments that the fast-tracked companies will receive.
They could, however, achieve a draft determination in June 2014 rather than August 2014, providing some procedural benefit.
Moody's currently rates nine out of ten water and sewerage companies in England Wales, as well as five out of eight water-only companies (WoCs).
- Water companies launch World Water Innovation Fund Water companies including Severn Trent and United Utilities are joining forces to form the World Water Innovation Fund,... Read More >
- SESW provides Ofwat with more evidence as it resubmits Business Plan Sutton and East Surrey Water (SESW) has resubmitted its 2015-2020 Business Plan to Ofwat having made some minor changes... Read More >
- Ofwat chairman tells companies to expect 'peak intrusion' Ofwat chairman Jonson Cox has warned water companies to expect a period of intense regulatory oversight to bring the... Read More >
- Scottish Water starts planning for the long term For SR21, Scottish Water is moving away from the traditional approach to business plans and developing a blueprint for the... Read More >
- Football teams and water companies: Closer than you think New season, new league, new challenges... Egremont Group's Owen Quinn and Alex Graham on the parallels between football... Read More >
- Abstract concept: How can water companies reduce abstraction? Despite concerns over supplies, water companies face pressure to reduce abstraction. As part of our Utility of the Future... Read More >
- The end of 'business as usual' in the water sector? James Connolly, head of partnerships at digital asset and works management company eviFile, assesses the message coming... Read More >
- Data Protection and Brexit - Is your organisation prepared? Guidance to help businesses and charities continue to comply with data protection law after the UK leaves the EU Read More >