Severn Trent Water

Tariff Model

Reviewing the British water services company’s pricing models after the acquisition of Dee Valley Water, before reporting to the regulator OFWAT.

Independent thumbs-up

We provided third party authentication of the pricing models after the acquisition, as required by the regulator

No interruptions

The review was carried out efficiently during a period of expected downtime

Actionable feedback

During the process, our feedback form allowed for the easy identification of any issues

Challenge

Following Severn Trent Water’s large acquisition, the company underwent a major restructuring, which was reflected in changes to their internal tariff model. As part of their internal quality control and risk management procedures, they required an independent review of the logic of the pricing changes, which would then be presented to the water regulator.

Solution

The tariff model had many unique formulae that had to be reviewed during a short, one-month window of opportunity when it wasn’t in use. We used our proprietary nXt software to review the logic of the pricing, by efficiently identifying and comparing blocks of similar formulae and sheets and feeding back in a form that allowed managers to easily identify and address any issues.

Results

Our review of the internal tariff model supported the management’s confidence in the pricing they had set, and provided external, independent verification before being handed over to the regulator for scrutiny.

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