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Ofwat increases ACTS costs allowance in business retail price caps

15th Dec 2022 12:13

(Alliance News) - Ofwat on Thursday said it increased the amount of allowed costs to serve, or ACTS, for water companies in its latest set of business retail price caps.

The UK water regulator said it will allow total ACTS costs of GBP43.91 per year, 23% higher than GBP35.80 in its September proposals.

These costs are per unique service, which is either a water service, a waste water service, or a trade effluent service.

It will allow ACTS running costs of GBP43.74, also 23% higher than GBP34.63 in September, while allowed meter read costs will rise 13% to GBP8.56 from GBP7.56.

Allowance for customer bad debt costs have been upgraded to 2.5% from 2.0%.

Ofwat said the estimated impact of the changes on customer bills before inflation will be an increase of between 6.2% and 6.4%.

On Tuesday, Chief Executive David Black said ahead of Thursday's published decision that the need for substantial improvement in the water sector was clear.

"Companies have fallen short of the expectations of customers and communities - they need to seize the opportunity to transform their performance...Turning around performance on the environment and improving resilience will require innovation, new approaches to managing water and investment," said Black.

"Significant improvements are needed to drive down water demand, improve customer service and reduce pollution incidents."

Ofwat said on Thursday it plans to review its business retail price caps again in three-to-five years.

Shares in Exeter, England-based water utility company Pennon Group PLC were up 0.7% to 920.00 pence in London on Thursday at midday.

By Greg Rosenvinge, Alliance News reporter

Comments and questions to [email protected]

Copyright 2022 Alliance News Ltd. All Rights Reserved.

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