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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