On 7 September, the Strategic Panel submitted its response to Ofwat’s consultation on the draft methodology for PR24.
The Strategic Panel – which is meeting for the seventh time today in London – has said that setting appropriate wholesale revenues, to fund the outcomes the non-household (NHH) market needs, and setting appropriate incentives to drive delivery were essential outcomes of PR24.
The response highlighted there are positives for the NHH market in the draft methodology in terms of delivering against the Strategic Panel’s priority market outcomes – like the proposal for more high-powered incentives (BR-MeX) on wholesalers to support retailers and NHH customers and the inclusion of NHH demand reductions in a performance commitment for the first time.
However, the Strategic Panel also highlighted concerns there is insufficient focus on the NHH market in PR24, including the cost and complexity of operating within it and the structural changes that may be required to fix it in areas such as metering and data quality – which remain fundamental issues.
The Strategic Panel is disappointed that PR24 is largely silent on the importance of metering, particularly in the context of the role metering can play in driving water efficiency and ensuring all customers receive accurate bills based on actual consumption.
Independent Chair Trisha McAuley said: “We look forward to working with Ofwat as we look to deliver the market outcomes set out in our priorities document published last week and as we seek to enable a flourishing competitive market for current and future customers.”
The Panel highlighted in the response that it is crucial to consider how the different mechanisms (PR24, Retail Exit Code (REC) review and the Market Performance Framework (MPF) reform) will work together to drive improved market outcomes.
The Strategic Panel was clear that it will be for the REC review, rather than PR24 to address areas relating to retailer margins going forward. The Strategic Panel is also working on a response to Ofwat’s consultation on the review of the REC ahead of the 14 October submission deadline.
The full response can be found here and the Strategic Panel priorities document published on 6 September can be found here.
If you have any questions on the response, please email
