The Cost Change Process
2026 Draft Determination
Every five years, Ofwat sets the funding that water companies can recover from customers to deliver investment and services. Because these plans are agreed several years in advance, new investment needs can emerge during the regulatory period.
The Cost Change process allows water companies to apply for additional funding for specific projects where there is a clear need for investment that could not be fully determined when the original plans were agreed. This can include areas such as maintaining and improving infrastructure, supporting growth and new development, enhancing cyber security, and meeting new environmental or water quality requirements.
The process helps ensure companies can respond to changing needs and continue delivering resilient, reliable services for customers and communities.
Cost Change 2026
Cost Change 2026 Draft Determination
Why are we responding?
Following publication of Ofwat's Draft Determination, water companies have the opportunity to respond by providing feedback and additional evidence. This helps ensure Ofwat has the fullest possible information before making its Final Determination on future investment and funding.
What this means for customers
Our Draft Determination response provides the additional information and evidence Ofwat has requested to support up to £190 million of additional funding through to 2030. A final decision has not yet been made, with that to follow from Ofwat in December 2026.
The proposed funding would support essential improvements including maintaining reliable services, investing in ageing infrastructure, supporting growing communities, and meeting new regulatory requirements.
Timeline
Date
Milestone
May 2026
South West Water submitted its Cost Change proposals to Ofwat.
August 2026
Ofwat published its Draft Determination.
September 2026
South West Water submitted its response to the Draft Determination.
December 2026
Ofwat is expected to publish its Final Determination.
Frequently asked questions
The Cost Change process allows water companies to respond to investment needs that have emerged or become clearer since the original plans for the regulatory period were agreed.
Ofwat’s Draft Determination represents its provisional decision. We have responded with further information and evidence. The final outcome will be confirmed through Ofwat’s Final Determination.
The submission includes investment relating to asset health, infrastructure resilience, growth, drinking water quality, wastewater infrastructure and cyber security.
Ofwat is expected to publish its Final Determination in December 2026.
Customer feedback helped to inform the original Cost Change submission. Customers supported targeted investment that helps maintain reliable services, protects the environment and reduces the risk of future infrastructure failures.
The Cost Change process allows water companies to respond to investment needs that have emerged or become clearer since the original plans for the regulatory period were agreed.
Ofwat’s Draft Determination represents its provisional decision. We have responded with further information and evidence. The final outcome will be confirmed through Ofwat’s Final Determination.
The submission includes investment relating to asset health, infrastructure resilience, growth, drinking water quality, wastewater infrastructure and cyber security.
Ofwat is expected to publish its Final Determination in December 2026.
Customer feedback helped to inform the original Cost Change submission. Customers supported targeted investment that helps maintain reliable services, protects the environment and reduces the risk of future infrastructure failures.
The Cost Change process allows water companies to respond to investment needs that have emerged or become clearer since the original plans for the regulatory period were agreed.
Ofwat’s Draft Determination represents its provisional decision. We have responded with further information and evidence. The final outcome will be confirmed through Ofwat’s Final Determination.
The submission includes investment relating to asset health, infrastructure resilience, growth, drinking water quality, wastewater infrastructure and cyber security.
Ofwat is expected to publish its Final Determination in December 2026.
Customer feedback helped to inform the original Cost Change submission. Customers supported targeted investment that helps maintain reliable services, protects the environment and reduces the risk of future infrastructure failures.