expenditure allowances are intended to fund. Within these areas we propose to address the following issues. Outcome delivery incentives 69. The Disputing Companies have raised issues with the ODI framework in two ways:
(a) they have asked us to consider the implications of the ODI framework for the overall balance of risk and return, and – in relation to that – the role played by the Aggregate Sharing Mechanisms ( ASM ) and the Outturn Adjustment Mechanism ( OAM ) (which can dampen the companies’ exposure to rewards and penalties under the ODI framework when performance levels turn out to be very different from those Ofwat had assumed in its PR24 FD); and (b) three of the Disputing Companies have asked us to consider some specific ways in which the ODI framework has been calibrated, in terms of the setting of Performance Commitment Levels ( PCLs ), ODI rates, and risk protections. 70.
The implications for the overall balance of risk and return are considered in the risk and return section below. In terms of the specific ways in which the ODI framework has been calibrated: (a) Anglian has asked us to consider the calibration of four ODIs: Total Pollution Incidents; Water Supply Interruptions; Leakage; and External Sewer Flooding. For Total Pollution Incidents, Anglian has asked us to reconsider the PCLs and ODI rates that have been set, and the extent to which different types of pollution incident might affect measured performance.
For the other three ODIs, Anglian has asked us to reconsider the PCLs that have been set; (b) South East has asked us to reconsider the calibration of two ODIs: Water Supply Interruptions; and C-MeX (a customer experience measure). For Water Supply Interruptions, it has asked us to reconsider the PCL and the collar (ie the upper limit) that has been put on the level of penalties that could be triggered. For C-MeX, it has asked us to reconsider the account that is taken of regional factors. It has also asked us to reconsider the application of a penalty under a PR19 ODI associated with non-household void properties; and (c) Southern has asked us to reconsider the calibration of 12 ODIs:
Total Pollution Incidents; Water Supply Interruptions; Leakage; C-MeX; D-MeX (Developer services measures of experience); BR-MeX (Business Retailer measures of experience; Water Quality Contacts; Compliance 19