Thames Water Utilities Limited responds to Ofwat’s draft determination for Price Review 24 (PR24)

Thames Water Utilities Limited has received its draft determination from Ofwat. This sets out Ofwat’s detailed view of the running costs, service levels and investments Thames Water would make over the period 2025-2030. 
 
We put forward an ambitious plan to Ofwat that focuses on what our customers and stakeholders told us were their priorities. We asked for £19.8 billion of total expenditure to maintain reliable supplies of safe, high quality drinking water and to take away and effectively treat wastewater across London, the Thames Valley and Home Counties now and in the future. 

Within this we put forward record investment to improve infrastructure, meet new environmental standards and reduce river pollution. Our plan will also improve the resilience of our critical infrastructure in the face of challenges such as climate change and population growth.

We believe our plan is ambitious, deliverable, financeable and investible. It is also underpinned by a package to support over 500,000 customers with reduced bills. 

Ofwat’s draft determination understandably challenges us on efficiency and delivery. They have been thoughtful in considering the funding we need for our day to day running costs and the improvements our customers and communities want to see.  

Although Ofwat currently categorises our business plan as ‘inadequate,’ this judgment rests on over 20 very specific tests around the scope of information to be provided, and evidence required to depart from Ofwat’s own assumptions.  Ofwat has made clear it will revisit its view if we provide further evidence to reach a final determination that is, in the round, affordable for customers, deliverable, financeable, as well as investable.  We welcome the opportunity to provide Ofwat with further evidence about the need for the investment we plan to make, our costs and how we will deliver it.   
 
As part of its draft determination, Ofwat has asked us to look again at our turnaround plan, and is seeking enhanced oversight of our delivery against it. We are in any case taking stock of our turnaround plan under our new leadership and reflecting on our progress to date. We will consider all of Ofwat’s proposals as we go through this process.  

This is one stage in a longer process. There is extensive detail in Ofwat’s draft determination and we will now consider this and make representations to Ofwat by 28 August 2024.  Ofwat will take this into account before making a final determination which is expected in December 2024. 
 
We will publish our draft determination response after it has been submitted to Ofwat.