Ofwat to be reviewed

September 24, 2010 at 1:43 pm

The government has announced that Ofwat, the water industry regulator, is to be reviewed. Defra (the Department for Environment, Food and Rural Affairs) has appointed David Gray as the lead reviewer for the check, which is set to find out whether Ofwat is still providing value for money.

The water industry is facing a number of challenges at the moment. Population growth, water shortages as a result of global warming, and aging pipes and water infrastructure are all placing a burden on the industry.

The review is to decide what changes need to be made for the water regulator, including looking into its responsibilities and how it is going to be able to ensure that it is still providing value for money.

Established 20 years ago, Ofwat was formed to regulate the newly privatised water industry. It has the power to prosecute water companies if they fail to deliver on service, and has been in the news recently for trying to restrict the amount by which Bristol Water could increase its bills, a decision which Bristol Water appealed and won.

The environment secretary, Caroline Spelman, said that the government needs to “make sure the regulator is in good shape to help the industry prepare for a changing climate and a growing population, at the same time as keeping bills affordable”. She highlighted how important it was that bill payers and water companies alike are reassured that they are still getting good value for money from the regulator.

The water industry is thought to be happy with the news, and the review is planned for completion by early 2011.

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Bristol Water to increase rates by 15% over five years

September 17, 2010 at 4:00 am

Customers of Bristol Water are set to see their water bills increase by 15% over the next five years, following a ruling by the Competition Commission that allowed the water company to raise bills above the limit set by Ofwat, the water regulator.

The ruling means that the average Bristol Water customer will see their bills rise from £157 in 2009/10 to £180 in 2014/15. The company has decided to increase the bills slowly to lead to a gradual rise that will avoid putting too much strain on its customers.

Ofwat had originally decided that Bristol Water would be allowed to raise bills up to £168 over the five-year period, representing a rise of 7%. Bristol Water complained that this was too low, and wanted to increase its bills to £202, a rise of 29%.

It appealed against Ofwat’s original decision to limit the rises and referred it to the Competition Commission in February this year. The latest news means that although Bristol Water has not managed to get the increase that it originally asked for it is not restricted to Ofwat’s limits.

Bristol Water supplies water to more than 500,000 homes and businesses across the Bristol region. It has claimed that the bill increases will allow it to provide customers with a better service and it will therefore lead to long-term benefits.

Alan Parsons, the managing director of Bristol Water, said that it was “pleased with the settlement in many respects” but that it will remain “highly challenging” to deliver all the requirements within the limits that it has been set.

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Hosepipe ban lifted in North-West

September 3, 2010 at 12:21 pm

For the first time in 14 years a hosepipe ban was imposed this July on parts of Cumbria, Greater Manchester, Lancashire, Cheshire and Merseyside after the water in many reservoirs in the area dropped to only half the normal level.

The good news for the millions of customers affected is that United Utilities have now lifted the ban in view of the heavy rainfall over the past few weeks.

The real reason for the ban was the dry start to 2010, the driest in fact since records began in 1929. The summer was less dry (in fact, parts of Liverpool suffered flash floods after half an inch of rain fell in just one hour) but still reservoir levels were low hence the ban on using hosepipes for watering the garden and washing the car.

Customers were generally diligent in saving water and only 90 formal warnings had to be issued up to the end of July. In all, customers saved a whopping three billion litres of water.

Reservoir levels are still low in the Pennines but those in Cumbria and North Wales are back to average levels for the time of year. Water from North Wales and Cumbria will be moved to the reservoirs in the Pennines utilising the integrated pipe system.

In response to critics who say the water company would be better off repairing leaks, United Utilities has said that costs are prohibitive and that a hosepipe ban every 15 years or so is preferable to the huge increases in bills necessary to ensure a leak-free network.

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