29th Aug 2014 10:45
LONDON (Alliance News) - UK water industry regulator Ofwat Friday said household water and sewerage bills will be 5% lower in real terms before inflation is applied between 2015 and 2020.
The figure is based on the regulator's draft determination on price controls for water companies in England and Wales. A final decision on bills will be made in December following feedback from water companies and consumer groups.
Ofwat said at the same time as lower bills, customer will see a better level of service. This would be supported by a substantial investment programme by water companies worth more than GBP43 billion, or almost GBP2,000 for every household.
The regulator has been assessing water companies business plans for 2015-20 setting out their proposed investment plans for the next five years and how much they plan to charge customers.
Of the London-listed utilities, United Utilities Group PLC and Severn Trent PLC resubmitted their plans after Ofwat said their proposals on risk and reward were not in line with its expectations.
"Some companies provided excellent, customer-focused plans. Others did not include sufficient evidence to justify their plans, and so we stepped in to make sure customers get a fair deal," Ofwat Chief Regulation Office Sonia Brown said in a statement.
Cathryn Ross, chief executive at Ofwat, said the regulator's draft determination is "good news for customers".
"Our challenge to companies has resulted in the sector's biggest ever customer conversation. Delivering for customers rather than ticking regulatory boxes will drive what companies do over the next five years," Ross said in a statement. "Some will find this tough, but companies which really stretch themselves will reap the benefits of increased customer trust and confidence."
United Utilities shares were quoted down 1.3% at 877.21 pence Friday morning, while Severn Trent shares were quoted flat at 1,953.00 pence.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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