Yorkshire Water’s Business Plan for 2020-2025
Ofwat’s final determination was published on 16 December 2019. We felt that this determination would require the company to focus on short term performance at the expense of longer-term capital investment. We concluded that the risks to our resilience and customer was at a level we could not accept and asked Ofwat to refer our determination the Competition and Markets Authority for review.
On 2 April 2020 we submitted our Statement of Case to the Competition and Markets Authority.
The data tables have been updated to remove APP1 from the extract. APP1 was updated after April 2019 in response to two IAP actions submitted in May 2019. However, the information within APP1 is now superseded by the additional new tables for performance commitments and outcome delivery incentives. We have updated the proforma to reflect this change. The specific change is to RP4 and is identified in red text.
The data tables have been updated to remove APP1 from the extract. APP1 was updated after April 2019 in response to two IAP actions submitted in May 2019. However, the information within APP1 is now superseded by the additional new tables for performance commitments and outcome delivery incentives. Please see the file labelled “Representations data template” for the latest information from Yorkshire Water on performance commitments and outcome delivery incentives.
We submitted our PR19 plan to Ofwat in September 2018. Ofwat reviewed the plan and published its initial assessment in January 2019. The assessment included a series of actions for Yorkshire Water to complete by 1 April 2019. This document is an addendum to our PR19 plan and summarises our response to the actions raised by Ofwat.
In our response we have made several key changes:
- We have adjusted our plan so that we are now able to propose a stable bill (that means that before inflation, the bill will not increase from 2019/20 prices). This means that customers in Yorkshire will have a decade of stable or falling bills.
- We have increased the company-funded support for customers who are struggling to pay their bills.
- We are starting work to reduce our gearing and plan to keep it below 70% from 31 March 2021.
- We have highlighted that it may become possible to re-phase our large environmental programme, leading to a further bill reduction prior to the final determinations later in 2019.
We will be producing a customer summary which will be published later this month.
We will republish our PR19 plan once we have received our final determination in December 2019.
Our next business plan (2020-2025)
Over the last couple of years we have been developing our business plan for 2020 to 2025 with our customers and stakeholders. The plan will outline how we will deliver water and waste water services in a resilient and sustainable way. Future planning is a big part of what we do and over 30,000 of our customers and stakeholders have been involved in creating the plan.
To date, our customers have helped us better understand what services are of a priority to them, and what the future of water and wastewater may look like. Customer and stakeholder participation in helping us prioritise and deliver our services to the region is vitally important to us.
Working with our regulator – consultation responses
The Water Services Regulation Authority, also known as Ofwat, is the water industry economic regulator.
As part of its role, Ofwat produces process and policy documents which they ask water companies to comment on. These are usually called consultations. We respond to these consultations to ensure that we contribute to how Ofwat’s policies are developed.
YW’s response to the economic asset valuation for the bioresources RCV allocation at PR19
This document is intended to inform interested parties how we have approached creating a bioresources price control.
Sludge is a by-product of the treatment of waste water. This sludge can be used to produce for example energy or compost. Sludge is no longer seen as a waste product but as a resource - a bioresource.
To enable a market to be developed for bioresources in England and Wales, Ofwat require all the water companies who treat sewage to categorise bioresource activities. This is achieved by separating out some of the overall value of the company (called regulatory capital value, RCV) into a bioresources area called a price control.
This is a summary of the document that we have sent to Ofwat and explains the approach that we have taken, using Ofwat’s guidance, to determine the bioresources RCV for YW.
Your Water Customer Community
Your Water is an online research community for our customers.
By engaging with our customers through the community, we are able to base major decisions on what customers want. Therefore, participants in the research will have the opportunity to shape the direction that we take over the next few years.
Your Water members our regularly invited to participate in surveys, quick polls and discussions. All activities are optional – you do not have to complete every activity that we send you and you will only be sent the activities which we think are most relevant to you.
The more feedback you give, the more rewards you will be eligible for and the greater say you will have in our future decision making!
Yorkshire Water’s economic asset valuation for the water resources RCV allocation at PR19
The 2019 Price Review (PR19) will see the introduction of a new separate binding price control on our revenues from water resources.
This document is intended to inform interested parties how we have approached creating a water resources price control.
Each water company has a single legacy Regulatory Capital Value (RCV) for its water assets, including its water resource assets. To determine the level of revenue that a company can recover as part of the new water resources price control, companies need to provide Ofwat with a proposed assessment of how much of the legacy RCV to allocate to the water resources price control.
This is a summary of the approach that we have taken to determine the water resource RCV for YW.