Severn Trent PLC ST Plc accepts Ofwat proposal to increase ODI cap (3924K)
13 December 2018 - 9:08PM
UK Regulatory
TIDMSVT
RNS Number : 3924K
Severn Trent PLC
13 December 2018
13 December 2018
Severn Trent Plc pleased to accept increase in customer ODI cap
with tougher targets
Following a consultation, Ofwat has today published the 'Final
Determination of in-period ODIs for 2018' which outlines their
proposal to amend Severn Trent Water's waste water Customer Outcome
Delivery Incentives (ODIs) for the remainder of AMP6.
The key elements of the proposal are as follows:
-- The cap on waste water customer ODIs will be increased from
2% to 2.6% of RoRE, based on performance from 1 January 2019;
-- Targets for internal and external sewer flooding and category
3 pollution incidents will become tougher by being set at the rates
achieved in 2017/18, effective from 1 January 2019; and
-- The incentive rate for external sewer flooding will be
reduced to GBP2,967 per incident from 1 January 2019.
We are pleased that Ofwat has recognised the valuable role that
incentivisation plays in enabling us to push forward our frontier
performance in waste water. The tougher targets will lock in the
significant improvements we have delivered since the start of the
AMP and the increase in the customer ODI cap will allow us to
enhance our performance even further, to the benefit of both our
customers and the environment.
We have fully embraced the role of incentivisation in our sector
and firmly believe it is in the best interests of our customers, of
whom 72% supported the principle of uncapping, based on a survey of
4,000 customers. We are therefore pleased to accept Ofwat's
proposal.
These prospective changes will have a limited impact on our
customer ODIs in the remainder of FY2018/19 and we continue to
guide to a net neutral customer ODI position for full year. We will
now have the opportunity to receive further outperformance payments
in FY2019/20 for some of our longer term customer ODIs, such as the
Water Framework Directive, which would otherwise have been
restricted due to the previous cap. We will now explore cost
beneficial options to fully realise these opportunities and will
provide guidance for FY2019/20 in our full year results
announcement on 22 May 2019.
Enquiries
Investors & Analysts
Richard Eadie Severn Trent Plc +44 (0) 7889 806578
Head of Investor Relations
Rachel Martin Severn Trent Plc +44 (0) 7824 624011
Investor Relations Manager
Media
Press Office Severn Trent Plc +44 (0) 247 771 5640
Jonathan Sibun Tulchan +44 (0) 207 353 4200
Cautionary statement regarding forward-looking statements
This document contains statements that are, or may be deemed to
be, 'forward-looking statements' with respect to Severn Trent's
financial condition, results of operations and business and certain
of Severn Trent's plans and objectives with respect to these
items.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would',
'should', 'expects', 'believes', 'intends', 'plans', 'projects',
'potential', 'reasonably possible', 'targets', 'goal', 'estimates'
or words with a similar meaning, and, in each case, their negative
or other variations or comparable terminology. Any forward-looking
statements in this document are based on Severn Trent's current
expectations and, by their very nature, forward-looking statements
are inherently unpredictable, speculative and involve risk and
uncertainty because they relate to events and depend on
circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future
performance and no assurances can be given that the forward-looking
statements in this document will be realised. There are a number of
factors, many of which are beyond Severn Trent's control that could
cause actual results, performance and developments to differ
materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to: the
Principal Risks disclosed in our latest Annual Report and Accounts
(which have not been updated since the date of its publication);
changes in the economies and markets in which the group operates;
changes in the regulatory and competition frameworks in which the
group operates; the impact of legal or other proceedings against or
which affect the group; and changes in interest and exchange
rates.
All written or verbal forward-looking statements, made in this
document or made subsequently, which are attributable to Severn
Trent or any other member of the group or persons acting on their
behalf are expressly qualified in their entirety by the factors
referred to above. No assurances can be given that the
forward-looking statements in this document will be realised. This
document speaks as at the date of publication. Save as required by
applicable laws and regulations, Severn Trent does not intend to
update any forward-looking statements and does not undertake any
obligation to do so. Past performance of securities of Severn Trent
Plc cannot be relied upon as a guide to the future performance of
securities of Severn Trent Plc.
Nothing in this document should be regarded as a profits
forecast.
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securities of Severn Trent Plc or any of its subsidiaries and is
not soliciting an offer to purchase, exchange or transfer such
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END
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