Price Review 2024 (PR24) and what it means for business customers

Every five years in England and Wales, a price review is conducted by the water regulator, Ofwat, to determine the allowed levels of investment and operating costs for the wholesale water companies for the next review period, and the level of household and non-household charges required to deliver that investment. The PR24 price review, which covers the 2025-2030 period, was finalised in December 2024. 

Following this change, a lot of customers experienced quite significant price increases for the 2025/26 financial year, with new charges currently being determined for 2026-27. We recognise that these increases come at a time when many businesses are already facing increased cost pressures, which is why we want to help our customers to prepare for the forthcoming changes and work with them to identify opportunities to reduce the amount of water they use, so that they only pay for the water they need. 

What happens during a price review? 

The regional wholesale water companies have a statutory responsibility to ensure that there is a secure supply of water to meet demand within their region for at least the next 25 years. As part of the price review process, each water company submits its proposed business plan to the regulator, which includes proposals on the level of investment they think is required to deliver safe and reliable water and wastewater services. These plans are then scrutinised by Ofwat to ensure they meet environmental improvement targets; address key challenges; and deliver value for money for customers. Following this assessment, Ofwat publishes its final determinations. 

Although the Final Determinations, which were published in December 2024, include provision for the largest investment programme since privatisation (£88billion over the 5-year period), the amounts allowed were significantly less (£16billion lower) than the wholesale water companies asked for. Six water wholesalers have subsequently appealed to the Central Market Agency (CMA) for higher increases. The CMA has since published its draft re-determinations, indicating that increases may go up by around 3% but this is now subject to consultation, with the final outcome expected early in 2026.  

But what does this mean for customer charges for 2026/27? 

Each water wholesaler in England has now published their indicative wholesale charges for 2026/27 (see wholesaler websites here) to provide retailers with an expectation of what the upcoming price increases might look like within their region. 

Based on our initial assessment of the wholesalers’ indicative charges documents, the overall increase in water and waste water charges for 2026/27 will range from region to region, with a breakdown provided in the table below*.  

*Please note, this table relates to the average increases for Business Stream’s customers and might not be identical to the average across all customers in the region. 

For customers on a Large User Tariff, there may be a further impact to your charges based on the decision being taken by some water wholesalers to phase out this tariff as a result of the increasing pressure on water supplies. An Ofwat consultation on this matter will shortly be published and we’ll inform any of our customers impacted.   

As a retailer, we understand that substantial investment is needed to address the current water infrastructure challenges; manage the impact of climate change; address water scarcity concerns; reduce pollution; and improve service levels, however, we also recognise the significant impact this will have on many of our customers.   

What can business customers do? 

To mitigate this impact, we’d recommend that businesses consider what they can do to reduce their water costs – and we’re here to help with that. 

There is scope for customers to reduce costs by lowering their consumption. The average business in the UK uses around 30% more water than it needs to – suggesting that there’s a real opportunity for businesses to reduce their water use and reap the benefits of doing so. In addition to softening the blow of increased wholesale prices and reducing both water and energy costs, it is also environmentally responsible and can help support companies’ sustainability targets and environmental stewardship programmes. 

We can help customers to understand their water use by installing water tracking devices, such as Automated-Meter Readings (AMRs) and using sophisticated data analytics to help identify opportunities to make savings. And we can deliver savings by working with our customers to detect and address any consumption spikes and by installing the right technologies to reduce water use. 

Water efficiency isn’t a new concept, but it’s never been more needed. It’s an effective solution to help lessen the impact of the forthcoming price increases while also helping to address water scarcity which is one of the biggest environmental challenges we’re facing. We’re here to help and will continue to do everything we can to support our customers.