Background
When we reconciled 2020-25 performance in the PR24 final determinations we used company forecasts for 2024-25, since outturn data was not available at that time. Companies report their actual 2024-25 performance in the 2024-25 annual performance report, due to be published in July 2025. Through a “blind year reconciliation” process, we will adjust companies’ price controls to account for the difference between companies’ actual 2024-25 performance and the forecast performance included in the PR24 final determinations.
This may result in adjustments to both the revenue allowances companies can recover from customers and the regulatory capital value (RCV) for each company.
On 5 March 2025 we published IN 25/01: Expectations for the PR19 blind year reconciliation. This set out our expectations for the blind year reconciliation process, including the information that companies would need to submit. The information notice also sets out in detail how, and when, any blind year adjustments for the different price controls will be applied.
Companies must provide the information we require for the PR19 blind year reconciliation no later than 15 July 2025. Our intention is to review and publish our draft determination on all the blind year adjustments by the end of September 2025. We must publish our final decisions on the ODI payments by 15 November 2025.
While there is no specified date by which we must complete the other elements of the PR19 blind year process, we aim to publish these no later than 15 December 2025.
What the blind year reconciliation covers
The blind year reconciliation uses a suite of models, which reflect the reconciliation mechanisms put in place for the 2020-25 control period (confirmed in the PR19 final determination in December 2019). In Table 1 of IN 25/01 we confirmed the mechanisms that the blind year process covers. For most PR19 reconciliation models, we expect companies to populate the PR24 final determination version for their blind year submission. The exceptions to this are the models below, which we have updated. We expect companies to populate the updated versions of these models:
- ODI performance model for 2024-25;
- In-period adjustments model for 2024-25;
- 2024-25 ODI differences model;
- Strategic Regional Water Resources model;
- RPI-CPIH wedge model v5.6;
- Business retail model (Dwr Cymru); and
- Business retail model (Hafren Dyfrdwy);
Companies will also need to populate the following data tables to support their blind year reconciliation models:
Companies should complete these data tables in line with the guidance in IN25/01 and in the data tables themselves.
Updating PR19 tax reconciliations
To enable companies to update their PR19 tax reconciliation models, we are publishing updated versions of the PR19 Financial Models. These contain changes to capital allowances for ‘super deductions’ that are applied to the main and special pools as announced in the 2021 budget.
- PR19 Financial Model – Capital allowance update – Affinity Water
- PR19 Financial Model – Capital allowance update – Bristol Water
- PR19 Financial Model – Capital allowance update – Hafren Dyfrdwy
- PR19 Financial Model – Capital allowance update – Northumbrian Water
- PR19 Financial Model – Capital allowance update – Portsmouth Water
- PR19 Financial Model – Capital allowance update – SES Water
- PR19 Financial Model – Capital allowance update – South East Water
- PR19 Financial Model – Capital allowance update – South Staffs Water
- PR19 Financial Model – Capital allowance update – Severn Trent Water
- PR19 Financial Model – Capital allowance update – South West Water
- PR19 Financial Model – Capital allowance update – United Utilities
- PR19 Financial Model – Capital allowance update – Wessex Water
Accounting for PR24 final determination errors
Our PR24 final determination included the option to account for unambiguous errors in allowed revenue within the blind year adjustment through the revenue forecasting incentive (RFI) formula. This is set out in section A3 of the Notification of the PR24 final determination of price controls letter sent to each company on 19 December 2024 and in IN25/01.
We confirmed to companies that we would retain the definition of unambiguous error we used for the 2019-20 blind year process (seen page 6 of IN2006 Approach to PR19 Blind year adjustments for 2019-20).
In our models we will separately identify the blind year adjustments that relate to:
- the difference between forecast and actual performance for 2024-25; and
- the correction of unambiguous PR24 errors that do not relate to past delivery.
We expect PR24 unambiguous errors to have been confirmed through the PR24 in-bound query process and to be recorded on the PR24 final determinations change log on our website.
On 27 August 2025 we shared a consolidated PR24 unambiguous errors’ log with companies. We asked companies to review the log for completeness and accuracy ahead of our draft determination for the blind year reconciliation 2024-25. Following companies’ feedback, on 3 October 2025 we published an updated PR24 unambiguous errors’ log containing the errors we have corrected for in our draft determination for the blind year reconciliation 2024-25. On 10 December 2025, we published a further update to the PR24 unambiguous errors’ log containing the errors we corrected for in our final determination for the blind year reconciliation 2024-25.