Water customers face price hikes

Water companies have submitted plans to Ofwat setting out their proposed price increases between 2010 and 2015.

Some companies are planning above-inflation price increases for supplying water to our taps

Some companies are planning above-inflation price increases for supplying water to our taps

All companies in England and Wales are required to submit their draft business plans to the water regulator detailing how it will be run over each five-year period.

Thames Water is proposing one of the highest rises, putting forward the case for an increase of 16% above inflation by 2015.

The company said that average bills would still be less than £1 a day, and it was undertaking its biggest ever investment programme.

CEO David Owens said: "Our customers have told us what they want our priorities to be, and what they would be willing to pay for. What we have produced reflects these views.

""Thames' customers have enjoyed the lowest bills in the industry for many years, but we now need to make essential investment to secure their services for the future."

Southern Water is proposing a 21% increase above inflation which would see the average bill increase to more than £400 a year.

It said this was the result of European legislation, a £10m annual increase in power bills and the expected housing growth in the region.

Southern Water CEO Les Dawson said: "We face a £655m programme of work to deliver 329 projects, more than anywhere else in the UK, specifically for legislation imposed on us from Europe. We also have to spend £450m to cater for growth in the South East region.

"We have no choice but to do this and it is not possible to meet these requirements - which make up nearly half of our proposed spending programme - and cover increased power costs without price rises and borrowing substantial amounts of money."

Commenting on the business plans, Dame Yve Buckland, Chair of the Consumer Council for Water, said: "Water and sewerage prices between 2010 and 2015 need to be set in line with what customers are willing and able to pay, and companies should deliver a package of benefits in line with what consumers see as a priority."

Ofwat will publish a summary of the plans and the issues raised at the end of September before meeting with each company to give them detailed feedback. The companies will then produce their final business plans next spring.

The exact price rises companies will be allowed to impose will be finally decided by Ofwat in November 2009.

View the business plans here.

Kate Martin



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