Since the submission of our PR24 business plan to Ofwat in October 2023, we have made some small changes to parts of our plan. These have been in response to requests from Ofwat or other regulators and to clarify some points in our original plan. The result of these changes to date is that Ofwat are now considering a PR24 business plan for Wessex Water that includes total expenditure of £5,007 million (down from £5,031 million in our October 2023 plan), and average annual customer bills of £666 by 2030 (down from £668 in our October 2023 plan). We expect Ofwat's draft determinations will be based on this expenditure and these bills.
The main reason for the change to our total expenditure for PR24 and associated average annual customer bills is a reduction in the costs of our smart metering programme. We have also made some corrections to the costs of planned net zero and biodiversity schemes, which has slightly affected our total expenditure.
Ofwat has also asked us to provide some further data tables to reflect the Environment Agency’s 18 September 2023 version of the Water Industry National Environment Programme (WINEP). These tables reflect the additional costs of delivering the full WINEP nutrients programme by 2030, rather than phasing some of this programme beyond this date (as proposed in our business plan). This would increase total expenditure to £5,416 million and average customer bills to £690 by 2030. However, it is important to note that this is not a revised Wessex Water business plan submission in that:
- the deliverability, financeability and affordability of a plan that included this work is not covered by our board assurance statements
- these numbers are unaudited and have not been assured or approved by our Board
- we have also not sought to update our view of the appropriate WACC to reflect an increase in the capital programme of this size.
Consequently, we do not expect Ofwat's draft determinations to include this expenditure and its impact on bills.
An average bill increase of up to 30% (up to £670) would still mean that Wessex Water bills are lower in real terms than they were 15 years ago. However, we are very conscious that this is a time of austerity so any bill increase will be unwelcome, and that some customers are already struggling to pay the current level of bills. Almost all our investments are driven by legal or regulatory requirements but even so, we will work hard with our regulators to minimise the bill impact.
For customers who find it difficult to pay, we already have tailored assistance programmes to help and we will extend these as necessary to meet our commitment of eliminating water poverty by 2030.