CMA summary conclusion provides scope for Yorkshire Water investment
The Competition and Markets Authority (“CMA”) has published a summary of conclusions regarding its final determination (“FD”), following the referral by Ofwat of its own final determination published in December 2019. We understand that the CMA’s full FD will be published in the coming weeks.
In comparison to Ofwat’s FD, the CMA’s FD represents an increase in AMP7 allowed revenues of £149m, at 2017/18 prices, including the impact of a 0.2% increase to the allowed return, and a more robust financial model. This will provide Yorkshire Water the scope to make the optimum investment decisions in AMP7 to address longer term challenges such as climate change and projected growth in the region.
Commenting on the final determination, a Yorkshire Water spokesperson said: “This has been a lengthy and thorough process by the CMA, but one conducted with rigour and fairness. Investment by water companies can play a critical role in response to climate change and can also help deliver economic recovery and we now have a conclusion which will help us to play our part.
“We can now draw a line under the last price review and start to work collaboratively with government and regulators to ensure that we restore the balance to the sector and deliver long term resilience whilst protecting customer interests.
“It is also time to look at the regulatory process and see if we can make it simpler and more effective. We are sure that Ofwat shares this aspiration.”
It is not possible to provide any further comment at this time. An update will be provided following full publication of the CMA’s FD.