The Competition and Markets Authority (CMA) has published a summary of its PR24 final determinations for the five companies that appealed Ofwat’s PR24 determination. Overall, the CMA awarded the appellant companies £463m of additional revenues, relative to those set by Ofwat. Key factors contributing to this were:
An increased cost of capital from 4.03% to 4.20% (appointee, CPIH-real)
£289m in additional enhancement costs
A 0.3 percentage-point reduction in the frontier shift efficiency challenge
Economic Insight advised Wessex Water during the redetermination process, helping them secure significant gains in relation to enhancement expenditure. In addition, Economic Insight supported all five appellants on frontier shift, where we secured a landmark win for the industry, likely with wider implications for other regulated sectors.
More information on the CMA’s summary of its final determinations can be found here