Ofwat has published its final climate change principles following stakeholder engagement conducted over summer 2025. The principles-based framework comprises six areas: aligned and transparent pathways, comprehensive and integrated actions, circular economy approaches, monitoring and reporting, research and innovation, and active stakeholder engagement. The final principles incorporate revisions following consultation on a discussion paper published in July 2025, which received 20 written responses and included workshops with regulators, companies and environmental groups. Key changes include additional references to the UK National Adaptation Programme and Welsh Government's Climate Adaptation Strategy for Wales, alignment with Drainage and Wastewater Management Plan guidance, and expanded detail on the Adaptation Reporting Power. The principles are intended to support the UK Government's water sector reform direction set out in its January 2026 White Paper 'A New Vision for Water', which followed the Independent Water Commission's July 2025 report. Ofwat confirmed its intention to engage with the sector on climate resilience metrics in spring 2026.

Ofwat has published guidance establishing the midpoint review process for the Major Water Infrastructure Programme (MWIP), which encompasses 30 large-scale water infrastructure projects identified in the 2024 price review (PR24). The guidance creates a combined gated process integrating The Regulators Alliance for Progressing Infrastructure Development (RAPID) oversight of early project development with Ofwat's Major Projects team regulation of later stage delivery. The midpoint review occurs between gate A and gate B during the Initial Development stage and replaces the previous Strategic regional water resource solutions guidance for gate two. While not constituting a formal gate or funding decision point, the review provides structured regulatory feedback to project owners. The guidance sets out detailed submission requirements across 12 assessment areas including needs case, project design, water resources, costs and benefits, programme management, land and planning, environmental considerations, drinking water quality, procurement, risks, board assurance and stakeholder engagement. Project owners must submit approximately 40–50 page reports, with RAPID providing feedback within 10 weeks and categorising any concerns as priority actions, actions or recommendations to ensure projects remain on track for gate B submissions.

Ofwat has published penalties guidance for the Major Water Infrastructure Programme, setting out how it will assess the quality and timeliness of project submissions. The framework aims to encourage high-quality submissions, timely delivery and transparent communication. Maximum penalties total 30% of eligible development costs across gates B to D, or 25% for in-house projects assessed at gates B and C. Land and enabling works costs are excluded. Companies should notify Ofwat of anticipated delays in writing at least 10 working days before the agreed submission date, providing evidence, proposed mitigations and a revised timetable. Delays outside companies’ control may be treated flexibly, while repeated postponements with inadequate justification may attract penalties. Quality assessments will consider the robustness of evidence, consistency with relevant requirements and plans, and management of uncertainty. Ofwat will decide penalties case by case and allow companies to respond before final decisions. For joint projects, penalties will reflect development cost allocations and responsibility for failures.

Ofwat has published its permitted adjustment under the Retail Exit Code (REC) for the 2026–2027 charging year. The adjustment applies to allowed cost-to-serve and meter-reading allowances and is based on CPIH inflation. The permitted adjustment rate is 1.12, increasing cost allowances to £56.09 for allowed cost-to-serve and £10.93 for meter-readings. Retailers will have to apply the revised REC allowances when setting maximum charges for Group One customers from 1 April 2026, and Ofwat expects them to review and update their billing systems before the start of the charging year. It will provide further guidance if any technical issues arise during implementation.

Ofwat and the Regulators’ Alliance for Progressing Infrastructure Development (RAPID) have published version three of the gate four guidance for strategic regional water resource solutions, replacing version two issued in April 2026. Gate four is the final stage of RAPID’s gated process and is triggered approximately 56 calendar days after the submission of an application for a development consent order, planning permission under the Town and Country Planning Act 1990, or development of national significance consent. Unlike the earlier gates, gate four assessments will be undertaken by Ofwat rather than RAPID in order to preserve regulatory independence during the planning application process.

Ofwat has published version 2.0 of its regulatory reporting requirements for new appointees, which will apply from the 2025–26 reporting year onward. This update is part of Ofwat’s broader regulatory reporting framework for the water sector in England and Wales and targets new appointments and variations, mandating annual submissions that consistently cover both financial and performance reporting. The revised requirements are aligned with AMP8/PR24 monitoring and include structured reporting on revenue, operating costs, reconciliations between regulatory and statutory reports, financial position, cash flows, net debt and transactions with associates. Practitioners should note the emphasis on ensuring comparability, transparency and Ofwat’s ability to monitor delivery against final determinations, in line with the broader 2025–26 regulatory reporting changes

Ofwat has updated its Rules of Procedure to reflect changes to the membership of three Board committees. The August 2026 amendments provide that the Audit and Risk Assurance Committee will include at least two non-executive Ofwat Board members, one of whom will chair the Committee. The People Committee will comprise one non-executive Board Member and the Board Chair, while the Nominations Committee will comprise one non-executive Board Member, the Board Chair and the Chief Executive. The wider Rules set out Ofwat’s governance arrangements, including Board decision-making, delegations, conflicts of interest and committee responsibilities.

The Ogden tables are prepared by the Government Actuary’s Department to help calculate lump sum compensation in personal injury and fatal accident cases. The Ogden tables set out multipliers which are applied to the present day value of a future annual loss or expense to take into account accelerated receipt and mortality risks.

Nuclear power plant located in the town of Oi in Japan.

Introduction During the due diligence exercise, any issue raising concerns will be flagged up in the due diligence reports of the relevant team (legal, technical, financial) and recommendations will be made as to how to best deal with it. For more details on due diligence issues in oil and gas transactions generally, see Practice Note: Due diligence and warranties in oil and gas M&A transactions. Typically, the principal ways to address specific concerns within the underlying sale and purchase agreement (SPA), and thereby allocate risk between the parties, include the following: • warranties • indemnities, and • interim period covenants The due diligence process is crucial to the underlying proposed acquisition since the relevant findings (legal, financial and/or technical) will directly impact upon the type of specific warranties and indemnities (as well as any particular purchase price adjustments and interim period covenants) which the buyer will seek to incorporate in the SPA. There is no ‘one size fit all’ approach—the specific warranties, indemnities

Who is the regulator for onshore oil and gas? Historically, the former Department of Energy and Climate Change (DECC) (on behalf of the Secretary of State (SoS)) was primarily responsible for the regulation of the UK’s oil and gas resources. Following the recommendations of Sir Ian Wood in his review of the UK Continental Shelf (UKCS) oil and gas recovery (Wood Review), the government established a new independent regulator, the Oil and Gas Authority (OGA) under the Energy Act 2016, which subsequently became the North Sea Transition Authority (NSTA). The NSTA now has responsibility for regulatory and licensing functions for all oil and gas exploration and production in the United Kingdom and UKCS. For more information on the NSTA, see Practice Note: North Sea Transition Authority (NSTA). On 14 July 2016, it was announced that DECC was to be merged with the Department for Business, Innovation and Skills to form the Department for Business, Energy and Industrial Strategy (BEIS). On 7 February 2023, the Department for Energy Security and Net Zero (DESNZ) was established and has

Regulatory body Prior to 2016, the Department of Energy and Climate Change (DECC) (on behalf of the Secretary of State) were primarily responsible for the regulation of the UK’s oil and gas resources. Following the recommendations of Sir Ian Wood in his review of the UK Continental Shelf (UKCS) oil and gas recovery (Wood Review), the government established a new independent regulator now known as the North Sea Transition Authority (NSTA) to take over DECC’s regulatory and licensing functions in respect of all oil and gas exploration and production on the UKCS. The NSTA was known until 21 March 2022 as the Oil and Gas Authority (OGA), which remains the formal legal name of the company and continues to be used in some legislation. The NSTA took over from DECC on 1 April 2015, initially as an executive agency of DECC. However, the Energy Act 2016 formally established the NSTA as a fully independent regulator, in the form of an independent Government company and amended the Petroleum Act 1998 (PA 1998)(the Petroleum