Water bills to fall, says Ofwat

August 21, 2009 at 3:47 am

Ofwat has ignored the braying of British water companies, and refused to increase the average household water bill by as much as £45 a year.

In July, Ofwat ordered Thames Water to scrap its planned price increases amid fears that the supplier was overcharging its customer base. Since then, even modest price increases – the 1% proposed by Anglian Water, for example – have been derailed by the industry regulator.

It begs the question: why, when companies are struggling to fill the coffers, are Ofwat withholding a potentially critical price hike? The answer is simple: suppliers have reneged on their promise to support and develop pipelines, protect customers, and improve the local environment.

Following the floods of 2007, Ofwat is adamant that water infrastructure needs to be improved, chiefly to prevent the loss of life and property in urban areas. The regulator wants suppliers to invest £21bn in flood defences, but also in environmentally sensitive campaigns, improving water quality and regenerating important wetland areas.

Ofwat Chief Executive, Regina Finn, believes that the recent proposals will encourage British water companies to foster amicable relations with their customers and says, “We’ve challenged the companies’ plans to ensure that customers get the best value for money.”

The unfortunately named, “Draft Determinations of Price Limits” is published every five years. If you are wondering how the changes will affect your household, consider reading the full document on the Ofwat website (pdf).

Ofwat’s final report will be released in November. The new water bills will come into effect during April of 2010.

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Leaking pipes lose billions of litres of water each day

August 17, 2009 at 2:47 am

Huge amounts of water are being lost from the country’s ancient system of pipes on a daily basis. Figures from Ofwat, the water industry regulator, that were obtained by the Liberal Democrats, show that 3.3 billion litres are being lost every day, an astonishing amount. Now there are calls to do more to fix the problem.

The Ofwat figures relate to 2007 and 2008, and will come as a surprise to many. Although the amount of water leaking from pipes across the country has long been an issue, the huge figure will still come as a shock.

The Liberal Democrats have used the figures to release details of a new proposal, which would have the express purpose of reducing the amount of water currently being wasted. Tim Farron, the environment spokesman for the Liberal Democrats, said that the amount of water being wasted daily was equal in volume to “1,300 Olympic-sized swimming pools”, and that this resulted in water bills going up enormously.

The Liberal Democrats have now proposed that strict fines be imposed on those water companies that don’t do enough to combat the high levels of water leakage being experienced across the country. This would mean giving a greater amount of power to Ofwat to set very strict leakage targets.

Other proposals that the party is suggesting include establishing a fixed high-end profit level that water companies can make from each home, as well as grants to help people install systems for collecting rain water and installing dual-flush toilets.

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Bills to be cut by 4%

August 7, 2009 at 4:32 am

It may not seem a huge amount but in a recession every little helps, so the news released today by Ofwat of proposed cuts in water bills of 4% should bring a smile to consumers’ lips.

In terms of hard cash this will equate on average to £14 per household, meaning that the average water bill will be reduced to £330 per annum before inflation.

Many will of course be disappointed by the news, and not just householders either, who had no doubt been hoping for a more generous reduction. Water companies are disappointed too, since they had called for an increase of £28 a year in order to deliver what their customers want, in particular a huge reduction in leakages in the system.

David Owens of Thames Water has already said that Ofwat’s announcement will mean that they can do nothing about leaks for the next five years. Metering programmes may also be affected adversely by the regulator’s decision.

Ofwat, on the other hand, have said that their decision still allows investment of £21 billion for the period 2010 to 2015. Regina Finn of Ofwat has pointed out that consumers can shop around for good deals on other utilities but with water they have no element of choice, hence the regulator’s decision to challenge “the companies’ plans rigorously”.

A consultation period will now follow and a final decision made in November with the new charges coming into effect next April. The water companies also have the opportunity to appeal to the Competition Commission.

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