In July 2024, Ofwat published its Draft Determinations under Price Review 2024 (PR24).The price review process is crucial for setting the price limits that water companies can charge customers over a five-year period. It also establishes performance commitments and service standards that companies must meet.
In this blog we’ll explore the main objectives of the draft PR24 and how Advizzo can support water companies in complying with Ofwat’s goals.
Key objectives of PR24
Ofwat’s draft decisions require the water sector in England and Wales to deliver the largest investment programme since privatisation. Covering the period from 1 April 2025 to 31 March 2030, the draft supports an increase in investment from £59 billion over 2020-25 to £88 billion for 2025-30.
The main objectives include:
- Improving environmental outcomes: Ofwat emphasises the need for water companies to take significant steps to enhance the environment. This includes reducing pollution, improving river water quality, and ensuring sustainable water resource management.
- Delivering value for money: Ensuring that customers receive high-quality services at a fair price is central to PR24. Ofwat encourages innovation and collaboration within the sector to address challenges and improve services.
- Resilience and long-term planning: PR24 focuses on building resilience to climate change, population growth and other long-term challenges by enhancing infrastructure, safeguarding water supplies, and managing risks.
- Customer and community engagement: Ofwat stresses the importance of engaging customers and communities, and considering their preferences and priorities when planning investments and service improvements.
- Performance and accountability: The draft emphasises the need for robust performance metrics and accountability, with penalties if companies fail to deliver on their commitments.
Taking a smart approach
In the PR24 draft, Ofwat places a significant emphasis on the rollout of smart meters. It is proposing the biggest smart meter rollout to date, with a target of delivering 10 million over the next 5 years.
Key elements of the smart meter rollout include:
- Customer engagement: Ofwat expects water companies to educate and engage customers about the benefits of smart meters, such as cost savings and better water management.
- Data utilisation: The rollout is not just about installation but also about effectively using the data generated to improve operational efficiency, enhance customer service, and develop more accurate demand forecasts.
- Leakage reduction: A major goal of the smart meter rollout is reducing water leakage by 13% – the lowest level since privatisation. Smart meters provide real-time data, allowing for quicker detection and repair of leaks, which aligns with Ofwat’s broader objectives.
- Support for vulnerable customers: Water companies are expected to have plans in place to ensure that vulnerable customers are not negatively impacted by the rollout.
How Advizzo can support water companies
Advizzo leverages behavioural science to create unique customer engagement solutions, helping water and energy customers better understand their usage and motivating them to make changes. Let’s take a look at how our programmes can support compliance with PR24:
Maximising regulatory compliance with data-driven insights:
Our platform provides powerful tools for water companies to track and report on Ofwat’s PR24 targets. Advanced analytics from our engagement campaigns allow for monitoring water consumption, leading to the swifter detection and resolution of leaks. Find out more about how our customer engagement programmes can help reduce water leaks. Personalised engagement can also improve customer satisfaction and C-MEX scores.
Supporting vulnerable customers and driving innovation:
Our engagement programmes help water companies identify and support vulnerable customers. By combining customer data with open data and using data science, we profile and segment customers to target those needing support. Our platform delivers personalised messages to help them reduce consumption and bills, and provide advice on available support measures. It’s what we’ve been doing in support of the Water4All project. Read more about how we can help support vulnerable customers.
Supporting the smart meter rollout:
Advizzo’s SaaS solutions use behavioural and data science to trigger customer engagement. We send personalised and timely messages across multiple channels, designed to motivate behavioural changes. This interaction builds confidence and trust, essential for encouraging smart meter adoption.
Our engagement solutions also educate customers on the benefits of smart meters, such as accurate bills and reduced consumption. We address common concerns like installation costs and data privacy, ensuring customers are well-informed. One persuasive strategy is comparing a customer’s average consumption with similar households that have reduced their bills by installing a smart meter. Find out more about how we can support the smart meter rollout.
Optimising asset management through smarter analytics:
Advizzo’s Asset Health Analytics helps water companies efficiently track and report on their smart meter rollout efforts and monitor connectivity levels. This ensures better infrastructure management, allowing companies to address issues proactively and plan retrofits more effectively. Our platform supports a smarter, more responsive portfolio, aligning with PR24’s goals to improve resilience and service delivery.
By leveraging the power of behavioural science and advanced analytics, Advizzo can help water companies achieve compliance, improve operational efficiency, and drive successful outcomes in line with PR24’s ambitious objectives. As the industry moves forward, adopting these innovative approaches will be crucial for delivering sustainable and resilient water services that benefit both customers and the environment. Get in touch to find out more!