The reduction, outlined in Ofwat’s 2000-01 Report on Tariff Structure and Charges is the first general reduction since privatisation and is in line with the price limits set by the Ofwat’s director, Ian Byatt, last November.

The 1999 Price Review saw domestic consumer water prices for 2000-2005 reduce by an average of 12%, but environmentalists doubt whether the Review’s investment plan is large enough to meet demands for environmental improvements. Last month, the House of Commons Environmental Audit Select Committee launched an inquiry into whether both “the process and the outcome” of the Price Review “took account of the polluter pays principle”(see related story).

“Everyone wants to see a reduction in bills,” Vicky Garner, campaign manager for Sufers Against Sewage (SAS) told edie. “But Environment Agency research shows that customers want to see an improvement in the environment rather than a decrease in bills. We want to see value for money and don’t want to see a slippage in such areas as the operation of wastewater treatment works.”

The Ofwat report also sets out how Byatt has used new powers to approve companies’ charges schemes. These schemes set out the level of charges, when they are applied, who should pay them, and what methods of payment are available to customers.

When approving the schemes, the Byatt directed companies to comply with the Water Industry Act 1999 on the installation of meters free of initial charge and with new Regulations aimed at protecting vulnerable customers.

Ian Byatt said: “This significant reduction in bills, has provided scope at the same time for companies to bring about a better balance of charges to customers. I have also secured, in line with the Secretary of State’s guidance to me and the companies’ duty to promote the efficient use of water, significant reductions in standing charges for both household and non-household customers.

“In addition, all companies are committed to providing rebates to customers whose properties are not connected to the sewers for surface water drainage. Seven companies now provide this rebate and the remaining three will do so by next year. This will ensure that customers who do not receive this service do not pay for it.”

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