Table of Contents
Waiting for OFWAT ........................................................................... 3
Allowed Return versus Cost of Capital............................................ 7
RAB-based valuation .................................................................................................................7
How does OFWAT assess the allowed return? ........................................................................7
What will OFWAT decide for Cost of Capital? ........................................................................10
Value Implications from Allowed Return.................................................................................11
Final Business Plans ........................................................................ 13
Northumbrian Water ....................................................................... 16
Pennon Group.................................................................................. 20
Severn Trent..................................................................................... 24
United Utilities................................................................................. 28
Appendix : Water Sector Performance During Previous Price
Reviews ............................................................................................ 32