When Ofwat set their final determinations in December 2024 they recognised there was still significant uncertainty for some critical cost areas. To enable costs to be funded before the next Price Review (2029); they have introduced the Cost Change process which enables companies to request additional expenditure in-period where justified.

The cost change process provides an important corrective mechanism to PR24 in support of the vision for the sector set out by the IWC and Water White Paper, and to help establish a smooth transition toward PR29. The changed expectations of companies and regulators are clear, and this process provides an opportunity to signal how we are working differently and in step to deliver better outcomes for customers and the environment.

Our cost change proposal sets out our additional investment needs, on top of our business plan to support what we need in the next 5 years - and beyond - to deliver for the region we serve.

Our 2026 cost change proposal focuses on Asset Health and Growth schemes. Within Asset Health, three critical asset classes where deterioration presents immediate risks to customers or the environment are treated water storage points; gravity sewers; and high voltage power supplies at strategic sites.

The impact of our cost change proposals is modest. Assuming in period adjustment is allowed, household customer bills, on average, will be £1.84 per day excluding inflation. This is an increase of 2p per day on the 2029-30 bill reflected in the final CMA redetermination.