PR19 Reconciliation Rulebook consultation - proposed approach and policy
| Date | 04 March 2020 |
March 2020
www.ofwat.gov.uk
PR19 Reconciliation Rulebook
Consultation – proposed
approach and policy
PR19 reconciliation rulebook consultation – proposed approach and policy
1
About this document
This document sets out details of our proposed approach to the reconciliations that
will be required during, and at the end of, the 2020-25 price control period. It
provides clarity on:
how we will make changes to companies’ allowed revenue and/or RCV;
which price controls are potentially affected; and
when and how we will administer the process.
Our approach to reconciliation of price controls at PR19 is a significant evolution of
our approach at PR14 reflecting a further development in how we undertake
reconciliations, through:
additional and better targeted reconciliations, to ensure companies’ allowed
revenues are appropriate; and
more in-period reconciliations to ensure changes to allowed revenue are
undertaken in a more timely way.
The rulebook comprises:
this document, the ‘PR19 reconciliation rulebook consultation – proposed
approach and policy’ which details our proposed approach and policy decisions
relating to the reconciliations that will be required during, and at the end of, the
2020-25 price control period;
the ‘PR19 reconciliation rulebook consultation – reconciliation model guidance’
which contains detailed chapters on each reconciliation model and the mechanics
of how they work including inputs, outputs and calculations; and
a series of reconciliation models which demonstrate the practical operation of the
PR19 reconciliation mechanisms. These models are referred to throughout this
document.
This document is structured in three sections. The first section overs the introduction
and background to the reconciliations, the second covers our overview and approach
to implementing the reconciliation and the third summarises our key policy decisions.
It should be read alongside the ‘PR19 reconciliation rulebook consultation -
reconciliation model guidance’ which contains a detailed chapter for each model
which we will use to reconcile companies’ performance over the 2020-25 period and
also includes details of reconciliations that are specific to individual companies.
PR19 reconciliation rulebook consultation – proposed approach and policy
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We ask for comments from stakeholders by 29 April 2020. We will publish our final
PR19 reconciliation rulebook policy document and ‘PR19 reconciliation rulebook -
reconciliation models’ by Autumn 2020 after considering consultation responses.
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