Periodic Review Process

The water industry is a highly regulated industry. Price limits, defining the maximum bill to customers for the supply of water, are controlled by the Water Services Regulation Authority, known still as Ofwat

The periodic review is the process adopted by Ofwat to review the future price limits and ensure that the water companies have sufficient finance to carry out their obligations. It involves every five years carrying out a detailed review of the water companies obligations, investment plans and finance requirements and following extensive consultation setting price limits for the next five years. The Asset Management Plan 5, AMP5, covers the period April 2010 to April 2015.

The Final Determination by Ofwat (published November 2009) shows that significant capital investment of £22 billion will continue in AMP5. Since privatisation 20 years ago the water companies will have invested over £80 billion to maintain and improve services.

Price limits will also increase by an average of 0.5% a year before inflation.

The main areas of investment are: