Regulatory Policy and Consultations

Welcome to Bristol Water’s Regulatory Policy and Consultations webpage. Here you can find our responses and opinions on the latest developments that are being discussed across the water sector. The most recently updated consultations are displayed below.

Regulatory policy and consultations


As regular and active contributors to Ofwat's plans for the future of water economic regulation, we often discuss issues extending beyond the water sector.


This section highlights some of our key contributions, including a piece we wrote on Regulating for Consensus and Trust that builds on our social contract work and sets out a new vision for economic regulation in England beyond just water.


We often work in collaboration with others on future ideas, as highlighted in our article in December 2021 about how outcomes incentives for the water sector can be set through customer research.  


We are always open to discussing all things economic regulation, so if you have any thoughts or comments, please contact us at  


Bristol Water’s view on cost efficiency


Assessing how efficient each company is forms a major part of the price determination process where Ofwat sets the amount of revenue we are allowed to collect over the following five-year period. How this assessment is carried out is a matter of expert judgement, with numerous measures and techniques available.


To support our understanding of how efficient we are relative to other water companies we have commissioned economic consultants NERA and Economic Insight to analyse the factors that drive costs in our Wholesale and Retail operations respectively, and how they should be combined into an assessment model.

Ofwat is shortly due to publish a consultation on the approach that it should adopt on efficiency assessment. We have provided this analysis to Ofwat for consideration in the development of its consultation. We are also publishing it today on our website to provide stakeholders and customers with a transparent view of our recommendations.

Out in the cold


Maintaining the trust of our customers is a top priority for Bristol Water. How well water companies plan and respond to operational incidents, in particular during severe weather, plays a significant part in maintaining customer trust. We set out in this document how we responded to the severe weather experienced across the UK in February and March 2018. We also set out what we learned from recent operational events such as this, specifically from Ofwat’s review into the water supply issues resulting from these weather systems, ‘Out in the Cold’, Ofwat’s company-specific letter to Bristol Water and the Drinking Water Inspectorate (DWI)’s letter to all water companies.

Ofwat’s overall assessment of our performance during the freeze-thaw was that we responded well and met our customers’ expectations, keeping disruption to a minimum. Although there were no company-specific learning points for Bristol Water, we have carefully considered our own experience and those from other water companies. This document sets out the actions already taken and those underway.

Strengthening Wholesaler performance and service in the business retail market


In July 2018 Ofwat published ‘Open for Business’, a report which assessed the state of the business retail market after its first year (it opened on 1st April 2017). The regulator identified a number of market frictions that it said had had a negative impact on retailers and their customers’ experiences during the first year of the market. In the ‘Call for Inputs’ review, Ofwat looked in-depth at the issues the regulator believed were having the biggest impact upon wholesaler performance in the business retail market and the quality of service received by retailers. The review was open from November until 10 December 2018.

For Bristol Water, it is critical for our retailers’ customers and the successful operation of the retail market that we understand and address the root causes of the dissatisfaction discussed in the review paper. We offer our thoughts on the introduction of an ‘R-MeX’ type performance commitment, including on the merits of reputational and financial incentives, as well as our work to date in cooperating with and leading existing working groups and initiatives. We are proud of our performance to date in the market, treating retailers as individuals with needs, and as valued partners working together to provide an excellent experience to customers. Our response letter sets out our ideas in further detail.

Driving transformational innovation in the sector


Ofwat has been exploring options for customer-funded interventions designed to drive innovation to benefit customers in the longer term. In particular, Ofwat proposed to make up to £200m available for innovation activities for the period 2020-2025, for example through the introduction of an innovation competition or an end-of-period roll-out reward. Ofwat also sought views on a range of additional policy options for encouraging companies to work together to drive innovation in the sector and to ensure that regulation is effectively facilitating innovation.

In our response we highlighted how the consultation jumps straight to one solution, without sufficient evidence and analysis as to what challenge this solves, or whether that challenge requires solving. The water sector fundamentally remains a local public service. It has and continues to operate within national and international frameworks, but most innovations will continue to develop bottom-up to address local needs. We stressed how we thought that Ofwat’s approach to the sector’s innovation strategy should reflect this. Likewise, the challenges society faces are complex, and to deliver the public value we think cross-sector and cross-utility approaches are likely to be the most efficient and effective. We therefore also encouraged Ofwat to consider how it encourages innovation that has a wider impact across different sectors and to work with stakeholders and other regulators to enable such opportunities.

Measures to reduce personal water use


Climate change, population increases, environmental requirements, and growing demand for water will mean that, in the future, there will be substantial pressure on surface and groundwater supplies, less water available per person, and a significant likelihood of more frequent, severe droughts. This consultation was launched by the Department for Food, Environment and Rural Affairs (DEFRA) to help the government understand a wider range of potential measures to reduce personal water consumption, and what reduction in water consumption is technically feasible and/or achievable.

In our response, we highlighted how in our research we found that younger generations face more complex and stressful lives than ever before, with potentially less time for and interest in saving water, versus a propensity to use more, for example by taking multiple showers per day. Without intervention, this creates a worrying trend for the future. We highlighted the need for ambitious building regulations for water consumption, the importance of partnership working and innovation, the importance of local circumstances and of local customer preferences, and for customer supply pipe adoption. We also explored the challenges of customer perception, and how we work with customers and other stakeholders to educate them on demand management and the benefits of water efficiency. We concluded that we thought a balance of cultural change, ‘hard’ solutions such as water-saving devices, and changes in legislation were required to adapt to the challenges ahead.

Our Routemap to Net Zero Carbon by 2030


We have identified a range of ways that we can meet the challenge of hitting Net Zero carbon by 2030. Our preferred route map considers a mix of pathways, including immediate action on water and energy efficiency, switching to renewable sources of energy, and using carbon offsets, all in a managed way to provide a trajectory to 2030.


The gases that contribute to climate change are collectively known as "Greenhouse Gases" - or GHG.  Our ambition is that by 2030 we will not make cause any GHG emissions to Earth’s atmosphere through our activities to supply water to customers.


We have proposed a mix of methods to achieve carbon neutrality by 2030. Our route map includes:


  • Making more efficient use of water and investing in more efficient operations to reduce costs as well as carbon. These also have positive additional impacts on society.
  • Replacing our fleet with electric vehicles and switching to biofuels for larger vehicles
  • Investing in solar photovoltaic energy to generate our own renewable energy
  • Switching to renewable supplies of gas and electricity
  • Buying a small volume of offsets to address the remaining 1% of our carbon footprint

2021 Climate Change Adaptation Report


The business of water supply can be significantly affected by climate change and we are already noticing its impacts. This is the second assessment of climate change risk that we have carried out: following our first assessment in 2011 we invested in significant changes to our infrastructure and systems to increase their resilience and ensure that we can continue to provide a reliable supply of high-quality water to our customers in the face of climate change.


The science of climate change continues to develop and the water industry has played a leading role in this. We will continue to engage in this process and will continue to review our vulnerability to the impacts of climate change – and although we anticipate that there may be less water available from the environment in the future, the investment we have made and the flexible nature of our supply system means that we are confident we can continue to meet our customers’ needs in the future.