27th Jun 2014 06:54
LONDON (Alliance News) - United Utilities Group PLC Friday said it has resubmitted its business plan for the period 2015-20 after regulator Ofwat said its proposals on risk and reward were not in line with its expectations.
UK water companies submitted business plans at the end of 2013 setting out their proposed investments plans for the next five years and how much they plan to charge customers.
At the end of the process, Ofwat marked the plans as either enhanced, standard or resubmission. Only two companies - Pennon Group PLC-owned South West Water and Morgan Stanley and M&G Investment-owned Affinity Water - were granted enhanced status meaning they "pre-qualified" to adopt Ofwat's risk and reward guidance, enabling them to benefit from a fast-track approval process.
United Utilities said, following Ofwat's risk and reward guidance, it is now proposing an average real term bill decrease of 2.3% for household customers across the five-year period. This compares with an average real term bill decrease of 1.7% in its initial plan, reflecting the combined changes of a lower cost of capital and expenditure revisions.
In addition the plan includes total expenditure of GBP6.6 million, which is similar to its initial plan. Total operating expenditure in the plan is GBP2.85 billion which is also similar to the initial plan.
Ofwat is expected to provide its view on the revised plan in August.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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