Ofwat publishes price determinations for fast track water companies
Ofwat has published draft price determinations for the three water companies whose business plans have achieved 'fast track' status.
Severn Trent, South West Water and United Utilities will now benefit from early certainty about their income from customer bills and will be able to press ahead with implementing their planned investments.
Under the determinations, Severn Trent customers will see their annual bills fall by £16 in real terms (i.e. adjusted for inflation) by 2025; for United Utilities, the figure is £49; while South West Water customers will see the most significant saving of £77.
The draft decisions will also mean the companies will spend £1.2 billion on improving the environment to reduce pollution and clean 4,500km of rivers. The companies’ investment plans include major infrastructure projects such as United Utilities’ £80M scheme to improve the Haweswater aqueduct which serves Manchester and the Pennines.
By 2025, the three companies will also need to cut leakage by at least 15% and provide help for 300,000 customers struggling to pay.
Ofwat Senior Director, David Black said: “We’ve been very clear that we expect water companies to deliver for customers and the environment and that companies can secure both of these outcomes. Severn Trent, South West Water and United Utilities all stepped up to the mark with their plans.
Our draft decisions for these companies show that investment in service and infrastructure can go hand in hand with more affordable bills.”
Water watchdog CCWater – which represents all consumers in England and Wales – says that it will carry out research with customers of all three companies to see whether they think the regulator’s proposals are acceptable. The Water Watchdog will use the findings to influence Ofwat’s final decisions on company price limits, service commitments and investment.
Tony Smith, Chief Executive of the Consumer Council for Water, said: “Customers should be the judge of whether these proposals are acceptable which is why we’ll be asking households to give us their verdict – if they don’t like what they see, we expect the regulator to make changes.”
“Our research suggests Ofwat could still go slightly further in reducing bills, without eating into the essential investment that every company in England and Wales has promised. Companies should also make clear what impact inflation and the regulatory rewards that customers pay for will have on their bills.”
The fast track companies will make representations on their draft determinations by 24 May. The regulator will then publish draft determinations for the other 14 water companies in England and Wales on 18 July.
Final determinations for all water companies will be published on 11 December.
- British Water seeks new chief executive as Martin retires Trade association British Water is seeking a new chief executive following Lloyd Martin's decision to retire during 2018... Read More >
- Water sector needs to 'hit refresh', Ofwat Chairman warns Ofwat Chairman Jonson Cox has warned that he does not believe the sector "has gone far enough" in addressing customer... Read More >
- MP challenges Ofwat to make prices fairer Water regulator Ofwat has been challenged by Islwyn MP Chris Evans to encourage competition in the sector and make prices... Read More >
- Reaching net carbon zero In summer 2019, the water industry committed to reach net carbon zero by 2030. This is a very ambitious aim and... Read More >
- Meeting AMP7 leakage targets Damian Crawford, head of smart networks & leakage at Stantec, discusses how becoming data-rich and knowledge-smart can... Read More >
- Rewarding excellence WWT content director Alec Peachey looks ahead to next year's Water Industry Awards. Read More >
- Delivering a smart network Tom Mills, senior director UK&I at Sensus, examines what a smart water network really means - and how to get there. Read More >
- A watershed moment for the water industry? Tessa Harding, director of water at Thomson Environmental Consultants, discusses the government's Environment Bill. Read More >