Back to the Cost of Capital challenge again in England and Wales
Waiting for ‘poacher turned gamekeeper’ Ofwat Chair Johnson Cox and colleagues to set an appropriate cost of capital in this year’s quinquennial price review for the privatized water companies in England and Wales – ‘Final Determinations’ due in December.
Meanwhile: ‘The Consumer Council for Water has responded to a new report by Citizens Advice which has found that regulators have allowed water, energy, broadband and telephone networks to overcharge customers by £24.1 billion over the past 15 years.’
‘The charity’s research shows that misjudgements by regulators, including Ofwat, on key decisions have meant customers have been paying far too much for the pipes and wires that connect people to the main utilities they depend on.’
CCWater has welcomed the report which reinforces many of the concerns already raised by us about regulatory over-generosity in the water industry.
Tony Smith, Chief Executive of the Consumer Council for Water, said: “Citizens Advice’s report echoes many of the concerns we’ve repeatedly raised about regulatory over-generosity in the water industry, which has benefitted shareholders but not consumers. Ofwat has listened to us and is now setting much tougher price controls, but since 2015 we estimate water companies have pocketed an additional £500 million windfall and we want to see a share of that returned to customers in lower bills or investment in essential services.”
Which is what we were saying all through my time in Consumer Council for Water, times when customers ended up paying $800m PER YEAR too much so as to ensure that the companies were able to finance the massive ongoing CapEx requirements (a ‘regulatory duty’ to ensure in the E&W regulatory approach).