Overview
- Ofwat published draft outcome delivery incentive (ODI) figures on Wednesday proposing a net £240 million reduction in customer bills by 2029/30 with about £107 million returned through 2027/28 bills.
- The ODI system moves money between companies and customers by levying penalties when firms miss environmental or service targets and paying rewards when they exceed them.
- Under the draft numbers Yorkshire Water faces about £75 million in underperformance payments and Thames Water about £46 million while Severn Trent and Northumbrian Water are among the largest recipients of outperformance awards.
- Household gains from the draft cuts are likely to be limited because Ofwat previously approved plans that could let companies recover up to £3.4 billion in extra charges and the net effect will vary by supplier and customer type.
- Ofwat will make a final decision by December 15 and any changes would be applied to bills from April 1, 2027, with the outcome shaping political debate over regulation, company finances, and calls for stronger oversight or ownership changes.