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Water companies announce massive profits

December 22, 2008 at 10:07 pm

At a time when we are all feeling the pinch when it comes to soaring energy and water bills, the last thing we need to hear is water companies announcing massive profits. Water bills have rocketed over the past year and consumers are likely to be extremely angry at the announcement from water companies that they have made very healthy profits. Severn Trent revealed this week that it has managed to make over £260m during the past six months. This figure represents a 4.6 per cent increase on the correlating figure for last year.

The boss of Severn Trent, Tony Wray, was delighted by the company’s figures. He revealed that it proves how the company has improved over the past year across its numerous sectors. However, consumers (especially the unlucky 3.7 million homeowners who are supplied by the water company, which increased bills by a further five per cent earlier this year) have been far less impressed by the news.

Whilst Severn Trent have so far had to bear the brunt of the anger from consumers, other water companies soon felt the public’s wrath as they announced their half-yearly statistics. United Utilities announced massive profits and Northumbrian Water and South West Water have also replicated this trend.

Angry customers have not been consoled by the advice from the Consumer Council for Water, which has urged water companies to make it clear what customers are getting for their money. Severn Trent believes that higher bills are necessary to help repair faulty pipes and improve general water quality but this has done little to calm the anger felt when the water bill pops through the letterbox.

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Water bills set to rise

December 15, 2008 at 5:07 pm

OFWAT, the water industry regulator, has announced plans by water companies across England and Wales to hike their bills by, on average, 9% above the predicted inflation rate between 2010 and 2015. That would bring the average household bill to approximately £350 per year.

Every five years, OFWAT sets price limits for water companies in England and Wales in its periodic review. Consultations for the next review (PR09), which is due in November 2009, are well underway and there is increasing pressure on OFWAT to allow early changes to the prices set for individual water companies in the 2004 periodic review (PR04).

OFWAT has just turned down a request from Sutton and East Surrey Water to hike bills by 10.2% above the inflation rate as early as next April. The utility company, which services the London boroughs of Merton, Sutton and Croydon, as well as parts of Kent, Surrey and Sussex, cited climatic events, such as the 2006 drought and the heavy rains the following year, as well as higher energy prices, to justify its request.

More generally, water companies blamed higher running costs, the effects of climate change and the necessary investments in infrastructure in the aftermath of floods for the need to raise prices. Bristol Water, for instance, is proposing in its draft business plan a rise in price of 26% above the predicted level of inflation.

In a time of soaring fuel bills and global economic uncertainty, this will come as yet another body blow for the average householder. The Consumer Council for Water, while calling on OFWAT to hold firm against the water companies, is urging consumers to take simple steps to save on water use, such as switching from baths to showers, installing dual flushes in toilets, ensuring dishwashers and washing machines are full before using them and recycling grey water for gardening.

According to the Environment Agency, generalising the use of water meters, which ensure that consumers only pay for the amount they actually use, remains the most efficient way to reduce water usage. Recent research shows that a metered household uses on average 10 to 15% less water than an unmetered one. With only one home in three fitted with a water meter at the present time, the margin for improvement and the potential savings are huge. The Environment Agency has set out to invert this tendency by 2015, particularly in water stressed areas.

Contrary to common belief, rainwater is much scarcer in the UK than in other European countries, in which the use of water meters is the norm. The UK only has 1334 m³ (cubic meters of water) per person per year compared to over 3000 m³ in France and 2700m³ in Spain and Italy. The South East is particularly water stressed, with hardly 263 m³ per person per year, due to the high density of population.

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6000 homes affected by burst water main

December 3, 2008 at 4:30 pm

A burst water main which deprived approximately six thousand homes and businesses of water earlier this week has been fully repaired. Several areas in the Helensburgh region were affected by the burst water main but a spokesman for Scottish Water has revealed that engineers “worked round the clock in very poor ground conditions” in order to fix the problem.

The poor conditions made the repair very difficult to complete and the company was concerned about the safety of its employees, who had to take “extra care in excavating the pipe and working on the repair”. However, despite this, normal water supplies are now being provided to homeowners. Whilst first turning on the tap, individuals may see some kind of discolouration but the water will run clear after a short while.

The burst water main was situated in the playing fields of Hermitage Academy School and local residents were outraged at the manner in which the crisis was handled by Scottish Water. The company handed out bottled water and also placed tanks around the region. However, one local resident reported that no restrictions were placed on the bottled water supplies, which led to some individuals driving away with their cars full of bottles.

Scottish Water has as yet failed to comment on this criticism but the spokesman for the company was keen to apologise to all local residents affected by the burst water main. He apologised for the “inconvenience caused by the burst” and wanted to thank the company’s customers for their understanding.

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