Utility Week

UTILITY WEEK | 2ND - 8TH MARCH 2018 | 23 Policy & Regulation PERFORMANCE COMMITMENT LEVEL – PERCENTAGE MET BY COMPANY mechanism (SIM) compared with 2014-15 when it was in the lower quartile. It is now listed as ninth in the industry with an overall SIM score of 84.6. "We will keep challenging ourselves for PR19 and have been working closely with our customers to develop our plans to ensure we continue to improve and always look for the next opportunity and innovations that will raise our performance across our service," the spokesperson says. Ofwat acknowledges that at PR14 com- panies set their own performance commit- ments, which led to a number of similar, but not identical, definitions. "As a result, it is not always possible to directly compare com- panies' performance in the current control period," it concedes. For the price control period 2020-25, Ofwat will use C-MeX and the developer ser- vices measure of experience (D-MeX), which it says will provide "stronger incentives to improve and include greater emphasis on customer satisfaction with their overall expe- rience of their water company". The service delivery report, together with the company monitoring framework and the financial monitoring report, forms part of its suite of tools to monitor performance and enhance water company transparency. With the regulator expecting water com- panies to set even more ambitious com- mitments to customers as part of PR19, the sector needs to step up and deliver in all areas, not just some. PR14 commitments At PR14, Ofwat required companies to talk and listen to customers about: the services they wanted their water pro- vider to deliver over the long term (outcomes); the specific levels of service or outcomes they expected companies to deliver (performance commitments); and the level of any outperformance and underperformance penalties (outcome delivery incentives, or ODIs). The information companies provide in their annual performance reports helps hold them to account, and the latest service delivery report draws on information published by companies for the year to 31 March 2017. The overall performance against commitments each company agreed to when Ofwat set price controls for the period 2015 to 2020 shows most met more than 60 per cent of their performance commitments for 2016-17. So far, companies report outperformance payments for meeting or exceeding performance commitments of £167 million. Ofwat says these payments will only be made where customers receive a higher level of service than prom- ised. Meanwhile, companies also report underperformance penalties of £76 million, whereby money will be returned to customers because commitments are not being met. Ofwat says its expects companies to set stretching per- formance commitments for PR19, with a greater proportion linked to financial incentives for PR19. LEAKAGE PERFORMANCE Company Commitment Ml/day Actual Ml/day 2016-17 2019-20 2016-17 Affinity Water 179 162 173 Anglian Water 1 192 192 186 Bristol Water 47 43 47 Bournemouth Water 2 - 20 19 Dee Valley Water 3 91 91 89 Northumbrian Water 137 137 134 Northumbrian Water 4 66 66 68 Portsmouth Water 30 30 30 SES Water 24 24 24 South East Water 91 88 89 Southern Water 5 - 87 88 South Staffordshire Water 71 71 70 South Staffordshire Water 6 14 14 14 Severn Trent Water 439 424 432 South West Water 84 84 82 Thames Water 630 606 677 United Utilities Water 7 - - 439 Dwr Cymru 177 169 175 Wessex Water 69 67 68 Yorkshire Water 297 287 295 1 ANH's commitment is based upon its three-year average leakage figure. This is assessed annually. 2 BWH's commitment is 20Ml/day by 2019-20. 3 Measured on a litres/property/day basis, all other figures are Ml/day. 4 Essex and Suffolk area reported separately. 5 SRN's commitment is to achieve a five-year average of 87Ml/d by 2019-20. 6 Cambridge area reported separately. 7 UUW's commitment is maintaining leakage at or below 462.7Ml/d from 2015-16. Its incentives are linked to the variance against this level. For 2016-17 it reported leakage of 439Ml/d, which was 23Ml/d below its committed level of leakage. Some companies have commitments that averages across the period or a level of performance at the period end. Figures shown are rounded. BWH PRT YKY ANH WSH WSX SES UUW FW DVW NES SVT SSC TMS SRN BRL SWT SEW 2015-16 2016-17 100% 80% 60% 40% 20% 0%

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