Cost adjustment claims – June 2023
In our PR24 final methodology, we said we would have an early cost adjustment claim submission and publication in summer 2023. The aim is to provide companies with an opportunity to comment on other companies proposed cost adjustment claims alongside their PR24 business plans.
We publish water companies’ cost adjustment claims below, which were submitted to us on 9 June 2023.
We also publish a summary excel file, which summarises the details of each cost adjustment claim and includes references to the relevant evidence file(s).
Cost Adjustment Claims Summary
| File | Date of release |
| Symmetrical CACs summary | June 2023 |
| CACs Summary – August 2023 | August 2023 |
Affinity Water Cost Adjustment Claims (CAC)
| File | Date of release |
| PR24 Cost Adjustment Claim Submission – Regional Wages | June 2023 |
| CAC calculations – 2022-23 prices | June 2023 |
| CAC Regional Wages Supporting File – May 2023 | June 2023 |
| EI report – population transience and retail costs | June 2023 |
Anglian Water Cost Adjustment Claims (CAC)
| File | Date of release |
| CAC_1.1_APH | June 2023 |
| CAC_1.2 – APH | June 2023 |
| CAC_2.1 – Lack of large works | June 2023 |
| CAC_2.2 – Lack of large works | June 2023 |
| CAC_2.3 – Lack of large works | June 2023 |
| CAC_2.4 – Economies of scale in large works white paper | June 2023 |
| CAC_5.1 – Leakage | June 2023 |
| CAC_5.2 – Leakage regression results | June 2023 |
| CAC_6.1 – Boundary box replacements | June 2023 |
| CAC_6.2 – Meter penetration analysis | June 2023 |
| CAC_6.3 – Boundary Box Failure Analysis | June 2023 |
| CAC_3.1 Energy CAC | August 2023 |
| CAC_4.1 – Phosphorus removal | August 2023 |
Hafren Dyfrdwy Cost Adjustment Claims
| File | Date of release |
| Cost Adjustment Claims June 2023 | June 2023 |
| Claims Calculations | June 2023 |
| Energy CAC | August 2023 |
Portsmouth Water Cost Adjustment Claims
| File | Date of release |
| CAC early submission – CAC1 – lumpy maintenance | June 2023 |
| CAC early submission – CAC2 – replacement head office building | June 2023 |
SES Water Cost Adjustment Claims
| File | Date of release |
| Early CAC_Pumping | June 2023 |
| Early CAC_Retail Scale | June 2023 |
| Early CAC_Softening | June 2023 |
Severn Trent Water Cost Adjustment Claims
| File | Date of release |
| Cost Adjustment Claims | June 2023 |
| Network Complexity Calculations | June 2023 |
| Arup STW Growth Calculations | June 2023 |
| STW Growth If Modelled Calculations | June 2023 |
| CAC – Energy costs and Phosphorus consent | August 2023 |
South East Water Cost Adjustment Claims
| File | Date of release |
| Oxera Review of PR24 cost adjustment claims | June 2023 |
South Staffs Water Cost Adjustment Claims
| File | Date of release |
| SSC topography cost adjustment claim | June 2023 |
South West Water and Bristol Water Cost Adjustment Claims
| File | Date of release |
| Cost adjustment claim initial submission | June 2023 |
| CAC liming methodology 1 updated | June 2023 |
| CAC liming methodology 2 updated | June 2023 |
Southern Water Cost Adjustment Claims
| File | Date of release |
| Cost Adjustment Claim – Coastal Population | June 2023 |
| Cost Adjustment Claim – Meter Replacement | June 2023 |
| Cost Adjustment Claim – Regional Labour Costs | June 2023 |
| Cost Adjustment Claim – Wastewater Growth | June 2023 |
| Cost Adjustment Claim – Bioresources AAD (For submission) | August 2023 |
| Cost Adjustment Claim – Coastal Population – update | August 2023 |
| Cost Adjustment Claim – Economies of Scale in Water Treatment | August 2024 |
Thames Water Cost Adjustment Claims
| File | Date of release |
| Cost Adjustment Claim | June 2023 |
| CAC calculations – 2022-23 prices | June 2023 |
| CAC – Mains replacement | August 2023 |
United Utilities Cost Adjustment Claims
| File | Date of release |
| CAC 001 – Reservoirs Dam Maintenance Cost Adjustment Claim | June 2023 |
| CAC_002 – Drainage Cost Adjustment Claim | June 2023 |
| CAC_003 – Ongoing Phosphorus Removal Opex | August 2023 |
| CAC_004 – Industrial Emissions Directive Compliance | August 2023 |
| CAC_005 – New Waste Permit Obligations | August 2023 |
Wessex Water Cost Adjustment Claims
| File | Date of release |
| CAC3 Growth at Water Recycling Centres (WRCs) | June 2023 |
| CAC1 Increases to efficient costs over time | August 2023 |
| CAC2 Mains replacement costs | August 2023 |
| CAC4 Catchment and nature-based solutions | August 2023 |
| CAC5 Industrial Emissions Directive costs | August 2023 |
| CAC6 Energy costs – REDACTED | August 2023 |
Yorkshire Water Cost Adjustment Claims
| File | Date of release |
| Combined sewers CAC | June 2023 |
| Phosphorus removal |
August 2023 |
Cost assessment datasets and guidance
Wholesale water models
| Version | Date of release |
| PR24 Cost Assessment Master Dataset, Wholesale Water Base Costs v2 | October 2022 |
| PR24 Cost Assessment Master Dataset, Wholesale Water Base Costs v3 | November 2022 |
| PR24 Cost Assessment Master Dataset, Wholesale Water Base Costs v4 | April 2023 |
Wholesale wastewater models
| Version | Date of release |
| PR24 Cost Assessment Master Dataset, Wholesale Wastewater Base Costs v2 | October 2022 |
| PR24 Cost Assessment Master Dataset, Wholesale Wastewater Base Costs v3 | November 2022 |
| PR24 Cost Assessment Master Dataset, Wholesale Wastewater Base Costs v4 | April 2023 |
Residential retail models
| Version | Date of release |
| PR24 Cost Assessment Master Dataset, Residential Retail v2 | October 2022 |
| PR24 Cost Assessment Master Dataset, Residential Retail v3 | November 2022 |
| PR24 Cost Assessment Master Dataset, Residential Retail Base Costs v4 | April 2023 |
Stata do files
| File | Version | Date of release |
| PR24 water base cost | PR24 water base cost v1 | October 2022 |
| PR24 water base cost v2 | November 2022 | |
| PR24 water base cost v3 | April 2023 | |
| PR24 wastewater base cost | PR24 wastewater base cost v1 | October 2022 |
| PR24 wastewater base cost v2 | November 2022 | |
| PR24 wastewater network plus base cost v3 | April 2023 | |
| PR24 residential retail | PR24 residential retail v1 | October 2022 |
| PR24 residential retail v2 | November 2022 | |
| PR24 residential retail v3 | April 2023 | |
| PR24 bioresources base cost | PR24 bioresources base cost v1 | November 2022 |
| PR24 bioresources base cost v3 | April 2023 |
NOTE: Any individual can open the above files, but in order to run the above files you will need a copy of Stata software. A license for this software is required and can be purchased from the official website of the software – https://www.stata.com/
Supporting spreadsheets
| File | Version | Date of release |
| Template and guidance for the submission of base econometric cost models ahead of the spring 2023 consultation | Template and guidance for the submission of base econometric cost models ahead of the spring 2023 consultation | November 2022 |
| Residential retail external data mapping | Residential retail external data mapping | October 2022 |
| Atypical expenditure adjustment calculations | Atypical expenditure adjustment calculations | October 2022 |
| Residential retail revenue | Residential retail revenue | October 2022 |
| Urban rainfall calculations | Urban rainfall calculations | October 2022 |
| Weighted average density – updated | Weighted average density – updated | October 2022 |
| Population density estimates using Middle Super Output Area population estimates | Population density estimates using Middle Super Output Area population estimates v1 | October 2022 |
| Population density estimates using Middle Super Output Area population estimates v2 | November 2022 | |
| Large STWs dataset (7B) and table 7D reconciliation | Large STWs dataset (7B) and table 7D reconciliation | October 2022 |
| Large STWs dataset | Large STWs dataset v1 | October 2022 |
| Large STWs dataset v3 | November 2022 | |
| Economies of scale at sewage treatment works derivation | Economies of scale at sewage treatment works variables derivation v1 | April 2023 |
Historical performance datasets
You can find this information in full – Historic performance
Supporting guidance
| Guidance | Date of release |
| Information Notice 23/07 Assessing the influence of enhancement expenditure on historical performance trends for PR24 | 14 July 2023 |
| Information Notice 23/05 Further guidance on price control deliverables for PR24 | 4 July 2023
21 July 2023 |
| Industrial Emissions Directive Letter from Ofwat to Companies | 1 August 2023 |
| Energy Cost Letter from Ofwat to Water Companies | 11 August 2023 |
| Bioresources Asset Condition Assessment Guidance
Bioresources Asset Condition Assessment scoring
|
12 October 2023 |
Reservoir information request
| Document | Date of release |
| Reservoirs Data Request – August 2023 – Letter | August 2023 |
| Reservoirs Data Request – August 2023 – Spreadsheet |
August 2023 |
Econometric base cost models for PR24
On 5th April 2023, we consulted on our proposed set of econometric models that we intend to use to help set efficient base expenditure allowances at PR24. It includes wholesale water, wastewater network plus, bioresources and residential retail models. This allows water companies to:
- account for early efficiency information in their PR24 business plans;
- focus more on long-term challenges; and
- submit high quality cost adjustment claims in June 2023.
The consultation webpage is here. We invite responses to this consultation by 12th May 2023 to [email protected]. Please use the consultation responses template saved here.
We will review responses ahead of our PR24 draft determinations, and consider making changes to our proposed cost models where appropriate.
We also invite water companies to submit base cost adjustment claims to [email protected] based on our proposed econometric models by close of play on 9th June 2023. Please use the cost adjustment claim template that is saved here.
Econometric base cost models for PR24: April 2023 consultation
| File | Date of Release |
| PR24 Econometric Base Cost Models Consultation | April 2023 |
Consultation response template
| File | Date of Release |
| Econometric base cost models for PR24: consultation response template | April 2023 |
Cost adjustment claim template
| File | Date of Release |
| PR24 cost adjustment claim template | April 2023 |
Ofwat supporting analytical files
Independent CEPA modelling report
| File | Date of Release |
| CEPA PR24 wholesale base cost modelling report | April 2023 |
Water company base cost model suggestions
| File | Date of Release |
| Affinity Water PR24 base cost modelling submission | April 2023 |
| Anglian Water PR24 base cost modelling submission | April 2023 |
| Northumbrian Water PR24 base cost modelling submission | April 2023 |
| SES Water PR24 base cost modelling submission | April 2023 |
| South East Water PR24 base cost modelling submission | April 2023 |
| Southern Water PR24 base cost modelling submission | April 2023
April 2023 |
| South Staffs Water PR24 base cost modelling submission | April 2023 |
| Severn Trent Water PR24 base cost modelling submission | April 2023 |
| South West Water PR24 base cost modelling submission | April 2023 |
| Thames Water PR24 base cost modelling submission | April 2023 |
| United Utilities PR24 base cost modelling submission | April 2023 |
| Dŵr Cymru Welsh Water PR24 base cost modelling submission | April 2023 |
| Wessex Water PR24 base cost modelling submission | April 2023 |
| Yorkshire Water PR24 base cost modelling submission | April 2023 |