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Water charges need to rise

June 17, 2008 at 2:54 pm

The water company United Utilities has called for an increase in the prices it currently charges its customers. It has stated that the recent hike in energy costs, combined with problems caused by the credit crunch, are having a harmful effect on its profits.

In its plea to Ofwat, the water industry regulator, it put forward its concerns for the future of the industry over the next ten years. The increased risk of flooding, and the challenges posed by climate change, are all areas that have been highlighted as points of concern.

It is thought that the energy costs for United Utilities could rise by 60% by the end of this year. However, although this may seem devastating, over the last year their profits have been very healthy, with net profits doubling from the previous year to £909 million.

The company provides water to seven million homes, but wants to improve the services that it currently offers its customers. Over recent months, such improvements have come in the form of easy-to-read bills and an updated online service.

Chief executive Philip Green claimed that keeping prices down would pose a “tough challenge” with all of the increased costs that the industry is facing. The company already spent £42 million on energy last year, and this figure is set to go up steeply.

However, Green also claimed that the company would keep the price rises below the rate that income is expected to increase, in a bid to help its customers keep up with their bill payments. Although fees will be higher, he did have some comfort for the company’s customers, stating that huge changes were being introduced to improve the quality of supply.

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