We’ve published our analysis of the 2018-19 financial performance of the water companies in England and Wales. It is written from a consumer perspective and focuses on issues where we think that the interests of customers could be better served.
The report looks at the opportunities for water companies to share outperformance of regulatory price controls with customers. We draw upon information collected from their Annual Performance Reports (APRs) in the period 2015-19.
Our conclusions include:
- Three water companies with the highest return on regulated equity (RoRE) shared some of the benefits with customers, as well as shareholders – a move we welcome. However, it is unclear whether all companies have considered benefit sharing beyond that automated through current regulatory mechanisms.
- All APRs should include a section on benefit sharing, clearly explaining what – if anything – has been shared with customers and the nature of these benefits.
- Water companies should tell customers about the improvements they are delivering for them, above and beyond the regulatory settlement. This will help companies strengthen their reputation among customers.
- We will explore ways to compare financial performance with other operational data to help us identify companies with significant financial outperformance but relatively poor operational performance.
The findings will help to inform our continuing efforts to get companies to share the benefits of financial outperformance with their customers.
- size: 0.96MB
For more information on the report, please contact us at Policy.Research@ccwater.org.uk