The Regulator’s (Ofwat’s) requirements for the PR24 Price Control required new approaches to be implemented for developing the investment plans. The submission required fully justified business cases for all investments including the environmental, security and common assets and associated projects. These required detailed economic assessments, structured business cases and alignment with long-term strategies.
PR24 was challenging for Affinity Water requiring the development of a robust, and optimised, investment business plan that could justify the required funding levels and address the numerous current and future issues.
Our work started with the development of an investment planning process to meet the demanding and very specific requirements of the Environmental Agency’s WINEP environmental approach. Detailed economic assessment and business case templates were developed and implemented across the whole environmental programme. The business case templates met all of WINEP and Ofwat requirements and utilised HM Treasury’s Green book approach.
The same approach was subsequently adopted for the whole investment programme, and align the long-term strategies required by Ofwat. The process was new to Affinity Water and required considerable support, training and coaching of staff and consultants. As the process was implemented, many other areas were also improved including a new Service Measure Framework, a revised risk and value approach, new strategies, and investment programme modelling and optimisation. We developed new governance and assurance processes to support the new planning process.
Our involvement continued and we wrote a number of submission documents and supported the production of the data tables. During the course of the project we provided support across a number of other areas such as technical and thought leadership; input into customer engagement; programme management; regulatory strategy; and delivery planning.
Affinity Water’s WINEP submission was well received and approved with minor changes. The overall Price Control Submission was delivered early and was considered Affinity’s best ever submission in terms of quality and compliance. Initial feedback from the Regulator has been positive.
The project has also left a legacy, with the end-to-end investment planning process being revised and utilised for the future.
