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NEA’s response to Ofwat’s consultation “PR24 and beyond: Performance commitments for future price reviews”

Date: 13th Jan 2022

NEA’s response to Ofwat’s consultation “PR24 and beyond: Performance commitments for future price reviews”

NEA welcomes the opportunity to respond to Ofwat’s consultation on performance commitments (PCs) for future price reviews. In summary:

  • We support the move towards common performance commitments, with bespoke commitments only in exceptional circumstances, however, we believe this must be supported with an appropriate method of measurement for each commitment to ensure results are comparable.
  • We request an additional consultation be issued, focused on ‘Price Control Deliverables’ (PCDs), to allow stakeholders the opportunity to address any potential conflicts and/or gaps.
  • We feel it is vital for Ofwat to reinforce their commitment to action for affordability and vulnerability, by introducing a vulnerability strategy at the regulatory level, with a requirement for companies to do the same.
  • We propose two additional PCs which directly relate to customers in vulnerable circumstances:
    • Companies to report on PSR recruitment as a direct result of their own activities; and
    • Companies to report on an additional measure of experience, which specifically surveys customers on the PSR.
  • We urge Ofwat to support the development of a financial vulnerability ‘flag’ on the PSR, which would encourage early identification and support of those in financial difficulty. Following the creation of this, it may be appropriate to introduce a complementary performance commitment focused on the numbers of customers identified as financially vulnerable.
  • We propose a PC focused on the reduction of debt in situations of severe indebtedness, supported by a PCD requiring companies to report the number of conversations they have with customers who default and still do not pay following a reminder.
  • We propose a PC which directly encourages companies to reduce the levels of water poverty in their operating areas, supported by a range of PCDs which directly correlate to the recommendations made in the CCW affordability review.
  • We would encourage Ofwat to consider if it would be appropriate to align PCs to the fourth priority outlined in Defra’s draft strategic policy statement as an additional category of outcomes.

Resources

Ofwat PR24 and beyond - Performance commitments for future price reviews
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