Water regulator Ofwat has confirmed the payments due to companies or customers as a result of water company performance against their 2020-21 performance commitments.
The outcome delivery incentives (ODIs) are the financial or reputational consequences for companies of outperformance or underperformance against their performance commitments and these are reviewed year on year to make them timely against the company performance and customer experience.
Overall, £67m will be repaid to customers.
The largest outperformance payment will be to Severn Trent Water, which will receive £25m. Thames Water and Southern Water will return £53m and £46m to their customers respectively.
Ofwat’s 2019 price control determinations set the price and service packages that companies have to deliver through to 2025.
The payments will affect the amount of revenue companies can recover from customers through 2022-23 bills.
For Severn Trent Water and Portsmouth Water, Ofwat has agreed to defer some ODI payments.
Following a consultation about the impact of COVID-19 on customers’ use of water, Ofwat has decided to review company performance on per capita consumption at the end of the 2020-25 period, rather than by individual year.
ODI payments for per capita consumption performance commitments will be determined at the end of the period for all years within the 2020-25 price control period.
Consequently, the regulator has not included any adjustment in relation to this performance commitment in its final determination.
Ofwat analyses and compares water company performance through publications such as its Service Delivery Report and Financial Monitoring Report, both of which are due to be published before the end of 2021.
The sector overview document for the final determinations is available on the Ofwat website.