Price Review 2024 (PR24) supports record levels of investment by water companies with £104 billion allocated over the next five years. This includes a fourfold increase in spending on new infrastructure and resources, reaching an unprecedented £44 billion. By 2030, we expect this investment to deliver tangible improvements for customers and the environment.
Our price controls are inherently forward-looking, but future uncertainties remain. Cost pressures on companies may shift unexpectedly and companies’ performance can vary. Therefore, we need a framework that ensures customer payments remain fair and appropriate as circumstances change. The process for adjusting companies’ allowed revenue in response to such changes is known as ‘reconciliations’.
On 19 May 2025 we published a formal consultation on the ‘reconciliation rulebook’ setting out our approach to the reconciliations that will be required during and at the end of the 2025-29 price control to take account of past performance and the various price control incentive mechanisms, and consulted on the models that calculate the reconciliations. We subsequently undertook further consultations on the ODI reconciliation model and PCD reconciliation models.
We have reviewed all comments made and now, 27 November 2025, set out our response to the consultation in PR24 reconciliation rulebook consultation – final policy approach and response. We have updated the spreadsheet summarising how the reconciliations will be implemented.
For smaller technical comments made with reference to individual models, responses can be found in the detailed model comments log and changes reflected in the individual models updated change logs. The table below sets out the various PR24 reconciliation models, together with a brief description and details of each model. The models maps [In Period] [End of Period] show how all the models work together.
Guidance on the overall process and detailed mechanics for each reconciliation model can be found in the updated PR24 Reconciliation Rulebook: Guidance Document.
If you have a question about any information on this page, you can contact us using [email protected].
A separate consultation on Changes to PR24 Price Control Deliverables was published 10 September 2025. We have published our decisions to the majority of areas consulted on today, 27 November 2025, with our decisions on storm overflow approach to assurance and claw back and cost sharing following in due course.
We also separately consulted on the cost change process and on 20 November 2025, published our final decision.
The tables below summarise the reconciliations and provides a link to the relevant model(s).
Table 1: Summary of common PR24 reconciliations
|
Reconciliation name (and link to model) |
Summary of the reconciliations’ purpose |
| In–period reconciliations | |
| Customer measure of experience (C-MeX) (republished 07 April 2026) [Excel] |
The C-MeX incentivises companies to provide excellent levels of service to their residential customers. It benchmarks companies using UK Customer Satisfaction Index data. |
| Developer measure of experience (D-MeX) (republished 07 April 2026) [Excel] |
The D-MeX incentivises companies to provide excellent levels of service to their developer customers. Based on its relative performance, each company can receive outperformance or incur underperformance payments each year. |
| In-period adjustments model [Excel – republished 07 April 2026] [OpenBox] |
This model adjusts price controls to reflect in-period adjustments to revenue from PR24 reconciliation mechanisms including the DDCM, delivery mechanism, cost change process and the outcome delivery incentives mechanism. |
| Revenue forecasting incentive (RFI) [Excel – republished 07 April 2026] [OpenBox] |
This is a symmetric revenue adjustment applied in period to reconcile any revenue under- or over-recovery in an earlier year. The RFI applies a financial penalty where differences between actual and allowed revenues are greater than 2%. |
| In-period and end-of-period reconciliations | |
| Bioresources revenue reconciliation [Excel – republished 07 April 2026] |
This reconciliation accounts for any difference between companies’ allowed bioresources allowance and the actual bioresources revenue collected from customers. It adjusts allowed revenue to reflect the difference between forecast and actual sludge volumes based on the variable cost of sludge. |
| Cost change model [Excel][OpenBox] |
The cost change process change process allows us to make adjustments for specific critical cost areas, if required, either within or at the end of the control period. The cost change model implements the changes resulting from this process. |
| Delayed delivery cashflow mechanism (DDCM) [Excel] [OpenBox] | This reconciliation returns money to customers where they have provided funding upfront for investment that has not been delivered. It is purely a cashflow mechanism affecting revenue with no ‘penalty’ element. |
| ODI performance model (republished 07 April 2026) [Excel] ODI performance model inputs conversion (republished 07 April 2026) [Excel] |
This reconciliation determines the level of outcome delivery incentives (ODI) payments that have been accrued by companies in each year of performance, based on the performance commitments set in the PR24 final determinations for each company. It incorporates the aggregate sharing mechanism (ASM) and outturn adjustment mechanism (OAM). |
| End-of-period reconciliations | |
|
Cost sharing reconciliation [Excel] |
This reconciliation accounts for any difference between companies’ actual performance against their totex allowances from PR24. This implements our approach to cost sharing.
We have prepared a dataset of allowances applicable to each cost sharing rate for use in this reconciliation model. |
| This reconciliation adjusts the allowed cost of new debt to reflect outturn data from our benchmark debt index over the 2025-30 period. | |
| Innovation Fund [Excel] [OpenBox] and Water Efficiency Fund [Excel] [OpenBox] | This reconciliation adjusts companies’ allowed revenues to reflect any unused funds. |
| Land sales [Excel] [OpenBox] |
This reconciliation adjusts companies’ RCV for any disposal of land by the regulated business over the 2025 to 2030 period. |
| Major projects [Excel] | This reconciliation adjusts allowances for major projects, including strategic resource options. It accounts for the extent of progression of major projects through both the competitive delivery process and RAPID gated process, where applicable. |
| Price control deliverables (PCDs) | This reconciliation will calculate the non-delivery PCDs and time incentive PCDs related adjustments for each company. These adjustments will be used to adjust the baseline expenditure allowance for the purpose of cost sharing calculations. They will also be used to adjust the companies’ revenue and RCV.
There are six PCD reconciliation models: the PCD aggregator model (updated 20 May 2026), growth at sewerage treatment works model, phosphorus removal model (updated 20 May 2026), sanitary parameters model (updated 20 May 2026), storm overflows model and supply interconnectors (updated 20 May 2026). Some files are large and may take a few minutes to download. For the best experience, we recommend opening them in the desktop version of Excel. |
| Real price effects (RPE) [Excel] | This reconciliation accounts for any difference between actual and forecast of the RPE indices we applied for labour; energy; and materials, plant and equipment costs. |
| Residential retail [Excel] | This reconciliation accounts for any difference between companies’ allowed retail allowance and the actual revenue companies collect from customers. |
| Tax reconciliation | This reconciliation accounts for any difference between actual and forecast headline corporation tax or capital allowance rates. It is incorporated within the most recent version of the financial model. |
| Third party services reconciliation [Excel] | We will reconcile allowed and actual expenditure on third-party services (price control), section 185 diversions (water only) and non-section 185 diversions costs. |
| Wastewater Enhancement Uncertainty Mechanisms
The Wastewater Uncertainty Mechanisms are not published as separate models. We anticipate making further changes to the price control deliverables models to incorporate the wastewater enhancement uncertainty mechanisms. |
We will adjust allowed revenues to reflect additional schemes or investigations as part of the Wastewater Enhancement Uncertainty Mechanisms for Storm Overflows, Investigations and Nutrient Balancing. |
| Water trading incentive [Excel] | This reconciliation calculates PR24 water trading incentives for qualifying trades starting in the 2025-2030 period. |
Table 2: Summary of company-specific PR24 reconciliations
|
Reconciliation name (and link to model) |
Summary of the reconciliations’ purpose |
| In period reconciliations | |
|
Business customer and retailer measure of experience (BR-MeX) [Excel] |
This reconciliation only applies to the incumbent companies operating wholly or mainly in England. It is designed to incentivise water companies to provide excellent customer service to businesses (non-household customers) and support better retail market functioning. |
| In-period and end-of-period reconciliations | |
|
Delivery Mechanism (DM) [Excel] |
This reconciliation only applies to Southern Water and Thames Water. It identifies the enhancement schemes for which additional funding is approved under the delivery mechanism and sets out the corresponding revenue and RCV adjustments. |
|
Havant Thicket |
This reconciliation applies to Portsmouth Water and Southern Water. It was always intended to occur at project completion, which was originally scheduled for early 2030. The project scope has since expanded, so completion is now expected around 2034. Accordingly, we plan to extend the price control at PR29 so that the reconciliation will take place after completion, potentially at a 2034 price review rather than at PR29 We currently expect to consult on our decision on the CAM2 request in mid-2026. We will update and publish the Havant Thicket reconciliation model subsequently, to reflect the final CAM2 decisions. |
| End-of-period reconciliations | |
|
Business retail [Excel] |
This reconciliation only applies to Dwr Cymru and Hafren Dyfrdwy. It will reconcile any difference between companies’ allowed business retail allowance and the actual revenue they collect from customers. |
| This reconciliation only applies to Portsmouth Water. This reconciliation performs a similar role to the cost of new debt reconciliation but is needed in addition due to specific differences in the debt index and other financing assumptions used for the Havant Thicket price control. | |
|
Quality and Ambition Assessment (QAA) [Excel] |
This reconciliation will only apply to Severn Trent, South West Water and Thames Water. It allows us to adjust the quality and ambition assessment (QAA) rewards and penalties based on the companies’ performance over the 2025 to 2030 period. |
We are also publishing the revenue feeder model [Excel] and RCV feeder model [Excel].