UK Water Companies Submit Business Plans to Ofwat

Water companies in England and Wales on April 7 announced their final business plans for the five-year period starting in 2010. These include proposed bill increases ranging from inflation only to almost 30 percent above inflation. The Consumer Council for Water says that while some companies have based their plans around what their customers would find acceptable, others clearly have not.

This is the second stage in a price-setting process that happens every five years. The regulator, Ofwat, will use the information to determine the maximum amount that each water company will be allowed to raise prices between 2010 and 2015.

Reasons given by water companies for the price increases vary but include tighter environmental and drinking water quality standards, higher energy costs, new financial pressures, and work needed to protect assets from natural disasters such as flooding.

Late last year, the Consumer Council for Water, together with industry bodies, undertook research to check customers' reaction to the original price increases proposed by the water companies.

Some companies' plans were viewed positively by their customers and at first sight the Consumer Council for Water is still pleased with plans produced by Dwr Cymru Welsh Water, Severn Trent Water, and Yorkshire Water.

Other water companies, such as Cambridge Water, Three Valleys Water and Southern Water, have revised their plans to bring them more in line with what their customers would find acceptable, although there is still more work to be done.

However, the proposals by a few companies still fall short of many customers' expectations. Despite pressure from the Consumer Council for Water, some companies' plans such as Bristol Water, Sutton and East Surrey Water, and South East Water remain out of line with what many of their customers would find acceptable.

Dame Yve Buckland, chair of the Consumer Council for Water, said: "In the current economic climate, price increases will be unwelcome for most of us.

"We recognize that some price increases may be necessary to enable companies to meet the pressures being put on water companies from growing populations, climate change, and tighter EU and UK standards.

"However, some companies seem to be making a late call for higher prices, which is of concern," Buckland said.