At the 2019 price review we set water companies service targets (‘performance commitments’) during 2020-25. This encourages the companies to deliver on the objectives that matter to today’s customers, future customers and the environment.
Most of companies’ performance commitments have rewards and penalties (‘outcome delivery incentives (ODIs)’) associated with them.
The majority of these ODIs are financial.
- If a company performs better than the performance commitment level, it may get a financial reward (‘outperformance payments’)
- If a company performs worse below the performance commitment level it may pay a financial penalty (‘underperformance payments’)
In this way, each company’s management and its investors are encouraged to deliver what customers want. They get outperformance payments for doing well; and make underperformance payments if they do badly.
In-period payments
Most of the outperformance or underperformance payments companies get for financial ODIs are paid to or recovered from each company every year during 2020-25 (or ‘in-period’).
We think this is better than waiting five years until the next price review process. This is because companies get the financial impact closer in time to the performance that generated it. This focuses each company’s management on delivering better services year after year and improves companies’ accountability to their customers.
In-period ODI determinations 2020-23
An in-period ODI determination is the process by which we adjust each company’s price controls to reflect companies’ performance against these in-period ODIs.
For the first three years of the 2020-25 period, we published separate in-period ODI determinations for each company. These can be accessed via the links below.
- In-period determinations for 2020-21
- In-period determinations for 2021-22
- In-period determinations for 2022-23
In-period ODIs for 2023-24
As part of the PR24 price review we assessed companies’ performance against their in-period ODIs for 2023-24. We did not publish separate in-period ODI determinations for each company for 2023-24. Instead, we adjusted companies’ price controls in our PR24 final determinations to reflect our view of companies’ performance.
Our view of companies’ ODI payments for 2023-24 are included within each company’s Outcome delivery incentives (ODI) performance models for 2023-24, which can be accessed via the link below.
ODI determinations for 2024-25
Companies’ ODI payments for 2024-25 are included in two places:
- ODI payments for forecast performance at the time of the PR24 price review are included within the price controls in the PR24 final determinations; and
- ODI payments for the difference between forecast and actual performance are included in companies’ ODIs determinations for 2024-25.
1. Forecast payments
As part of the PR24 price review we assessed companies’ forecast performance against their in-period ODIs for 2024-25 and their end of period ODIs for 2020-25. We adjusted companies’ price controls to reflect our view of companies’ forecast performance in our PR24 final determinations.
Our view of companies’ forecast in-period ODI payments for 2024-25 and forecast end of period ODI payments for 2020-25 were included within each company’s Outcome delivery incentives (ODI) performance model for 2024-25. These can be accessed via the link below.
- PR24 final determinations models
- In addition to the company specific models, at PR24 we published PR24 final determinations – Accounting for past delivery, which set out (in sections 3.1 and 3.2) some of the key ODI issues at a sector level.
2. Payments for the difference between forecast and actual
As part of the blind year reconciliation for 2024-25, we assessed companies’ actual performance against their in-period ODIs for 2024-25 and against their end of period ODIs for 2024-25. We compared this to the forecast ODI payments which were applied to price controls as part of the PR24 final determinations.
In our ODI final determinations for 2024-25, we adjusted companies’ price controls for the difference between our view of companies’ actual and forecast performance on their in-period ODIs for 2024-25 and their end of period ODIs for 2020-25. These can be accessed via the link below.
Final view of actual performance for 2020-25
Following completion of the blind year process in 2025, we undertook an exercise to consolidate a final view of companies’ performance against their PR19 performance commitments for the 2020-25 period and the resulting outcome delivery incentive (ODI) payments.
This reflected our interventions and the impact of restated performance and ODI payments where we have accepted these as part of our in-period ODI final determinations or PR24 final determination.
Following company feedback, we are now publishing the final version of this dataset. The data underpins our annual water company performance reports for the 2020-25 period.
Final view of actual performance for 2015-20
On 10 February 2021, we published Outcomes, performance commitments and outcome delivery incentives 2015-20 (PR14). This was the final view of companies’ performance against their PR14 performance commitments for the 2015-20 period and the resulting outcome delivery incentive (ODI) payments.