Ofwat has launched a consultation on proposed amendments to three PR24 environmental performance commitments—total pollution incidents, serious pollution incidents, and discharge permit compliance—arising from updates to the Environmental Performance Assessment (EPA) methodology and new Environment Agency guidance. Ofwat proposes to align definitions, targets, and incentives with the revised EPA for 2026–27 onwards, adjusting measurement baselines and exclusions to reflect updated reporting rules. For total pollution incidents, Ofwat intends to reset performance commitment levels and recalibrate incentive rates to maintain comparable challenge levels across companies, while retaining existing parameters for the other two commitments. The consultation closes on 10 December 2025.

Ofwat has launched a consultation on proposed changes to how water companies in England and Wales calculate and report leakage. The proposals aim to improve the accuracy, consistency and transparency of reported figures by making greater use of smart meter data and reducing reliance on samples, estimates and assumptions. Ofwat is seeking views on whether to retain the current combined top-down and bottom-up reporting approach, how smart meter data should be incorporated and whether leakage should continue to be calculated using night-time flows or move to a 24-hour water balance. It is also considering how upstream leakage should be reported, whether a new metering standard is needed and whether changes should be introduced immediately or in phases. The consultation closes on 9 October 2026.

Ofwat has launched a consultation on draft guidance for a common framework on environmental incentives. This consultation builds on the proposal that was outlined in its January 2024 conclusion document on environmental incentives to support sustainable new homes. This consultation aims to simplify the environmental incentive process for developers and support wider uptake, creating a framework that is consistent and clear. The consultation closes on 10 September 2024.

Ofwat has launched a consultation, seeking views on how it should introduce three proposed new remuneration and governance rules in the Water (Special Measures) Bill. The proposed rules include prohibiting performance related executive pay when company performance does not meet specified standards, requiring companies to assess whether individuals in senior roles meet ‘fitness and propriety standards’, and requiring companies to involve consumers in decision-making processes. The consultation closes on 19 November 2024.

Ofwat has launched a consultation on proposed changes to the worked examples used in its bulk charging rules for new appointments and variations (NAVs). The proposals would require incumbent water and wastewater companies wholly or mainly in England to publish worked examples using a combination of standardised and incumbent-specific parameters, update the existing examples to better reflect typical NAV developments, introduce a third example covering sites with wastewater pumping stations, and present the information using standardised tables and enhanced commentary. Ofwat says the changes are intended to improve transparency, consistency and confidence in bulk charges, help NAVs better understand likely charges and support effective competition. Subject to responses, Ofwat intends to implement the changes from 1 April 2027. The consultation closes on 10 September 2026.

Ofwat has launched a consultation inviting feedback on its proposed performance-related pay (PRP) prohibition rule under the Water (Special Measures) Act 2025 (W(SM)A 2025). The rule seeks to prohibit PRP for water companies during any year in which they fail to meet one or more of the following four key standards: consumer matters, environmental performance, financial resilience, and criminal liability. The rule is designed to apply to major undertakers under the Water Industry Act 1991 (WIA 1991)—excluding new appointees—and will take effect from 1 April 2024, with a planned review in 2027. Stakeholders are requested to email their responses to RemunerationGovernanceRules@ofwat.gov.uk by 29 April 2025, with submissions to be published on Ofwat’s website.

Ofwat has outlined the impact of its new rules on executive bonuses and dividends in the water sector during their first full year of operation. These rules require water companies to demonstrate that executive bonuses are sufficintly linked to company performance. As a result, nine water companies will be unable to use customer money to fund bonuses, with Ofwat directly blocking three companies from allowing customers to pay £1.5m towards bonus payments. Ofwat's powers could be extended under the proposed Water (Special Measures) Bill, enabling it to prohibit performance-related pay in certain circumstances. Additionally, Ofwat has published its 2023-24 Monitoring Financial Resilience report, which reveals a £400m reduction in dividend payments compared to the previous year.

Ofwat has published its initial regulatory approach to artificial intelligence (AI) adoption in the water sector during the transition to new regulators in England and Wales. The plan aims to support the safe, secure and responsible use of AI by providing guidance, enabling innovation, and monitoring AI adoption and impacts. It sets out actions to better understand AI use across the sector, develop practical guidance, support innovation, establish monitoring and reporting approaches, and build Ofwat's own AI capabilities, while working collaboratively with water companies and other regulators. The document is intended to provide a foundation for future regulatory frameworks and highlights the potential implications of AI for regulatory processes, customer and environmental outcomes, operational performance and economic growth during a period of significant sector reform.

Ofwat has published frequently asked questions (FAQs) explaining the new appointments and variations (NAV) regime, under which companies can be appointed to provide water and/or sewerage services in specific areas or existing appointees can apply to extend their service areas. Ofwat explains that NAV applications may be approved where an area is unserved, a qualifying large user wishes to change supplier, or an existing company agrees to transfer part of its area. Applications must demonstrate that customers and the environment will be no worse off than under the incumbent provider and, for sites in Wales, that customers and/or the environment will be better off. The FAQs also explain the regulatory framework for NAVs, including charging arrangements, infrastructure standards, customer protections, arrangements in the event of company failure, and measures to ensure the continuity of essential water and sewerage services.

Ofwat published on 30 April 2026 a document which sets out the Development and Commercial stage and Gate C requirements for projects in the Major Water Infrastructure Programme, explaining how project owners must demonstrate that a major water infrastructure project has matured sufficiently to proceed towards procurement or, for in-house delivery, transition out of the gated process. The guidance describes Gate C as the point at which Ofwat assesses readiness to commence procurement, with a focus on matters not already addressed through planning and consenting processes, including project design and technical scope, costs and benefits, programme management, environmental permitting, land acquisition, drinking water quality, digital twin development, customer and stakeholder engagement, board assurance, procurement strategy, risks, and baseline data. It distinguishes between publishable Part A materials and non-publishable Part B materials, with additional commercial, financial, market engagement, risk allocation, contractual, value-for-money and governance requirements for projects proceeding under Direct Procurement for Customers or the Specified Infrastructure Projects Regulations. The document also explains submission, query, assessment, transparency and information-sharing expectations, including publication requirements and Ofwat’s approach to determining whether projects may progress, whether procurement consent should be granted, and whether penalties or further actions are required.

Ofwat has published its Template CAP Agreement (Baseline) (Baseline CAPA), providing a standard contractual starting point for future, less complex Direct Procurement for Customers (DPC) projects. The Baseline CAPA reflects the principles and risk allocation approach in DPC Guidance 2.0 and is intended to promote consistency across projects, reduce transaction and procurement costs, build market familiarity and support value for money for customers. Ofwat states that use of the Template CAP Agreements is mandatory, with water companies expected to adopt the Baseline CAPA as the starting point for project-specific CAP Agreements for future, less complex DPC projects. Departures from the baseline drafting and risk allocation approach must be justified, although Ofwat acknowledges that project-specific adaptions may be required in some circumstances. Ofwat has also published Agreed Form documents and a cross-reference between the Baseline CAPA and DPC Guidance 2.0. It is working to finalise a separate Template CAP Agreement (Target Cost) later in 2026.

Ofwat has published its conclusions following consultation on promoting water efficiency in wholesale charges for business customers. Ofwat has confirmed that it will amend its Wholesale Charging Rules to clarify that long-run costs include water scarcity and the supply-demand balance, and to permit differential charges reflecting environmental considerations, including incentives for water and wastewater efficiency. Ofwat will consult on the proposed amendments later in 2026 and require water companies to report on their approach to 2027–28 charges.