Bristol challenges Ofwat over limits

Bristol Water has rejected Ofwat's determination of price limits for 2010-2015, and will ask for the issue to be referred to the Competition Commission for review. The company's challenge comes as most of the other water utilities accepted their final price determinations.

Supplying more than one million people and businesses in the West, Bristol Water said it worked hard during the price-setting process to find solutions to a range of issues at the least cost to customers. Its proposals would mean the average household bill rising by 87p a week by 2015.

Without this money, Bristol Water said it would not be able to carry out enough maintenance and replacement of pipes, pumping stations and treatment works; supply enough water to meet rising demand; provide proper security of supply for 450,000 people.

Alan Parsons, Bristol Water's managing director, said: "Ofwat has proposed a determination that is not in the best interests of current and future customers. What we must deliver will cost much more than Ofwat has allowed.

"Our customers have benefited from a long period when we have been able to minimise bills by stretching our assets' working lives. Unfortunately, increased levels of investment cannot be deferred any longer."

With other water companies having accepted their final price determinations, it is likely that the industry's supply chain will come under pressure to meet tougher efficiency measures.

South West Water has accepted its £705M investment limit, but chief executive, Chris Loughlin, said: "This is a tough settlement and to deliver the necessary network and service improvements will involve prioritising some schemes."

Severn Trent's chief executive, Tony Wray, said the company could meet its "tough" obligations through process and efficiency improvements.

Thames Water's interim chief executive, Martin Baggs, welcomed changes from the draft determination.

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