Eccleston Aerial

Pictured: Construction of a storm tank as part of a £5 million sewer improvement scheme in St Helens. Underground tanks such as this help to store huge amounts of water during heavy rainfall, preventing flooding.

As we enter the next five years, we have refined our KPIs to reflect the changing regulatory environment

We will first report against these refined KPIs for the year ending 31 March 2016.

Our financial KPIs will remain the same except that we will no longer be including capital investment specifically due to Ofwat’s move away from opex and capex and into the new totex-based price control for 2015–20. The definitions are as outlined in our 2010–15 KPIs.

Financial KPIs 2015–20

  • Revenue
  • Underlying operating profit 
  • Underlying earnings per share 
  • Dividend per share
  • Gearing: net debt to regulatory capital value

Our operational KPIs have evolved to reflect the move to a totex price control, with a totex outperformance measure replacing the previous separate opex outperformance and capex outperformance measures. We are including an outcome delivery incentive (ODI) KPI in our wholesale business to monitor our performance against these important new operational measures. This replaces the previous serviceability KPI which is incorporated within the ODI measures. With the retail household price control now being separated, we are introducing a new KPI to measure our costs in this area. In the business retail price control, with the expansion of competition, we are including a new KPI measuring the impact of customer gains and losses.

Operational KPIs 2015–20

Company objective/KPIDefinition
Best service to customers
Wholesale outcome delivery incentive (ODI) compositeNet reward/(penalty) accrued across United Utilities’ 18 wholesale financial ODIs
Service incentive mechanism – qualitativeOfwat derived index based on quarterly customer satisfaction surveys, measuring the absolute and relative performance of the 18 water companies. Each company receives a score in the range of zero to five, with five being the highest attainable score
Service incentive mechanism – quantitativeOfwat derived composite index based on the number of customer contacts, assessed by type, measuring the absolute and relative performance of the 18 water companies. Each company receives a SIM point total, where the lowest score represents the best performance
Business retail customer growthAmount of additional revenue from winning customers from other water retail providers less the amount of revenue lost from losing customers to other water retail providers
Lowest sustainable cost
Totex outperformanceProgress to date on cumulative totex outperformance across the wholesale water and wastewater price controls versus Ofwat’s allowed totex over the 2015–20 period
Financing outperformanceProgress to date on financing expenditure outperformance secured versus Ofwat’s allowed cost of debt of 2.59 per cent real over the 2015–20 period
Domestic retail cost to serveAverage cost to serve in our domestic retail business
Responsible manner
Leakage – average annual leakageAverage annual water leakage from our network quantified in megalitres per day
Environment Agency performance assessmentComposite assessment produced by the Environment Agency, measuring the absolute and relative performance of the 10 water and wastewater companies across a broad range of areas, including pollution
Dow Jones Sustainability Index ratingIndependent rating awarded using sustainability metrics covering economic, environmental, social and governance performance