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UtILItY WeeK | 28th November - 4th December 2014 | 9 Interview T he live interview with Cathryn Ross was the best bit," said a delegate at a recent Utility Week confer- ence. "She's just so clear – such a great communi- cator." It's a good thing too, because one year into her tenure, the chief executive of Ofwat has a lot to commu- nicate. Today, she's speaking to Utility Week at the regu- lator's Bloomsbury Street London office, over the road from the British Museum and just 400m away from the Competition and Markets Authority HQ – a proximity that may prove useful in the months ahead. Just weeks before Ofwat's final determinations on the 2014 price review, Ross has a lot on her mind. Not only will the December announcements put the seal on a his- toric review, ushering in a significant period of change; they will also mark the transition into the delivery stage of an asset management plan (AMP) cycle that will be every bit as complex and challenging. Then there's the minor matter of the introduction of competition to the non-domestic market and the looming spectre of upstream reform. And all this on a budget decimated by the Comprehensive Spending Review, a reduced head- count and a new operational structure. Luckily, Ross has got the brains for it. As the impressed conference delegate noted, she's a great communicator – clear and concise while conveying complex ideas, with- out being showy or condescending. She returned to Ofwat in October 2013, having le her role at the regulator as director of markets and economics in 2011 for a relatively short stint at the rail regulator. "It's flown by – but it's absolutely lovely to be back. If someone had said, would you come back, I would have said yes, absolutely, but if someone had said, how long would it be, two-and-a-half years wouldn't have been the period I would have given." She's too diplomatic to say so, but chances are she wouldn't have chosen the situation she walked back into, either. Her predecessor Regina Finn le the organi- sation unexpectedly in May 2013, just before the price review began in earnest, following a bruising row with the sector over the attempted introduction of modifica- tions to the licence. Incoming chair Jonson Cox poured oil on those troubled waters, but when Finn departed at a crucial moment, and shortly aerwards a hole of £5.6 million was discovered in Ofwat's budget, it looked as though the regulator was on its uppers. Nevertheless, for Ross, when the advert came out, it was a "dream job". "My husband saw the news that Regina was leaving and the advert came out and he said, 'so you'll be applying for this'," she says, with customary rapid-fire delivery. "To which my initial response was, 'I like what I'm doing, I'm just getting to grips with rail' – but it lodges in your brain and niggles away. That was the job of a lifetime, that would be amazing – so I threw my hat in the ring, and here I am." The rest is history – 12 months of it now, which centres on the price review. For Ross, this was a return to familiar territory, as she had been heavily involved in draing the initial principles that set the framework for the review. "When I was around last time I was playing quite a key role in putting together those principles and even at the time that I was working on those four years ago I was really conscious it was quite an ambitious agenda, some quite substantial changes, customer engagement and outcomes and rebalancing risk and reward and totex. It was all absolutely the right thing to do but it was quite ambitious, and honestly, I didn't think that Ofwat would achieve as much as it has. That's no credit to me at all, it's all stuff that was happening while I wasn't here. The highlight is coming back and living that review." It will reach its culmination in a few weeks – can Ross give us any clue as to what the final determinations will be? She laughs: "Honestly – no! I couldn't, even if in principle I could, because we haven't made the decisions yet. We've still got the board meetings to be had, conver- sations to be had, and decisions to be reached. There's nothing to tell yet – watch this space " It's been a tough price review, with the companies smarting under a reduced weighted average cost of capi- tal (Wacc) as well as getting to grips with the introduction of four separate price controls. While some companies have flourished – notably South West Water and Affinity, both fast-tracked with "enhanced" status – others have struggled. Thames Water, United Utilities and Bristol Water are notable among them, with the regulator break- ing with tradition to announce multi-million pound dis- crepancies between their sums and its own ahead of the dra determinations in August. Does Ross expect any of the companies to play their wild card option and refuse the final determination, effectively taking the regulator to the CMA? "Who knows? It's part of the process, if compa- nies don't feel they can live with the determination, then it's their call. Really, the ball's in their court – it's part of the process, and not something I'm particularly bothered about. Time will tell." She's positive about the companies' response to the new process. "This time we followed a much more con- sciously iterative process and if you think about the scale of the challenge that we're putting on to the sector in terms of how we want the sector to engage with its cus- tomers, for example, conversations companies will be needing to have with their investors, it's a big step up, a big change for people, and people don't get their heads around a change of that magnitude coming to it from a cold start. So I don't think we were going to deliver what we needed to deliver by following the old process with the big reveal in the dra determination. It's been quite arduous, I think, for us and the companies because there's been a lot more interaction. But it produces a much better outcome and frankly it goes to that maturity "