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What is PR19 and Why It Matters

Water and sewage systems are vital services for both residential and commercial customers. Industry regulator Ofwat recognises the society’s role in shaping the priorities of the water sector, precisely that of the providers delivering such services.

 

Private water companies set their priorities based on price regulation schemes involving consultations with the general public, wide-interest groups, and consumers. The Price Review, or PR19 for short, dictates what happens to prices in the sector from 2020 to 2025.

 

PR19 is Ofwat’s latest judgment on the draft determinations that offers a comprehensive look into how the UK water industry will be operating for five years. Experts bill it as the ‘game-changer’ that imposes stringent measures to water firms and their services, pricing, and incentive packages.

 

This article sheds light on PR19 and how it affects the water sector as a whole.

 

What is PR19?

 

The PR19 is the document published by Ofwat that reveals in detail the latest judgment of the stricter Price Review measures involving fourteen water firms in England and Wales. This comprehensive plan was created after several consultations involving both companies and their consumers.

 

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The results of this review serve as the basis for pricing, services, and incentives that the water companies can provide for the next five years, from 2020 to 2025. These matters will involve the four pillars of the industry, which include efficiency, innovation, customer service, and resilience.

 

The goal of PR19 is to provide better service to consumers while also highlighting environmental improvements that support the government’s long-term targets.

 

Rachel Fletcher, Ofwat Chief Executive, calls PR19 as a serious stretch in achieving the goals of the water sector. It involves reducing as much as two-thirds of supply interruptions and slashing pollution incidents by over a third.

 

It also aims to lessen mains bursts by up to 12% and cut leakage rates by as much as 16%. This bold target will save as much water as required by Manchester, Leicester, Cardiff, and Leeds combined.

 

Ofwat is also eyeing to boost innovation competition by injecting up to £200 million from 2020 to 2025. Water firms are advised to play on the increased business efficiencies and decreasing costs, indicating that an extra £12 billion will be spent on planned investments and supplemental costs for operations.

 

PR19 for customers

 

Water and sewage services will be optimised for customers through PR19. Aside from the expected improvements in the resilience and efficiency of the companies, several measures will also be set in motion to support about 1.5 million consumers who are unable to fulfill their payments.

 

Water bills for UK households will enjoy a £17 cut on typical use for 2020. It is the direct result of the price review, which sees a drop to £396.60 from £413.33. This amount drop in price is like water bills from a decade ago.

 

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The 4% price cut means that consumers will have access to drinking water, dependable sewage systems, and environmental protection for only £1 a day.

 

Christine McGourty, Water UK CEO, highlighted the water industry’s commitment to providing excellent value for money to water consumers. For a low price of £1 per day, customers can expect responsible wastewater management and world-class water and related services.

 

PR19 for companies

 

Water companies are feeling the pressure of the PR19, particularly since they are expected by the general public to enhance their services.

 

Tony Smith, Chief Executive of Consumer Council for Water, stated that more steps should be taken to ensure that everyone can have affordable access to water and water-related services. He added that water firms have ‘had it good’ for a long time. PR19 might, therefore, be the reprieve that allows a fairer market.

 

Ofwat has expressed its intention of abolishing the status quo and promoting a customer-centric industry, laying importance on efficient customer communication.

 

The industry watchdog believes that water companies doing their best to serve consumers will be able to enjoy more significant financial support. On the other hand, those found taking advantage of the situation will be penalised and sanctioned to return what is owed to customers.

 

 

 


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