Water bill rises pegged back

PROPOSED rises in water bills for customers in the region have been dramatically pegged back by the industry regulator.Ofwat said yesterdayaverage household bills for Anglian Water should increase by just £19 between 2004-5 and 2009-10 – a rise of 7%.

By Jonathan Barnes

PROPOSED rises in water bills for customers in the region have been dramatically pegged back by the industry regulator.

Ofwat said yesterdayaverage household bills for Anglian Water should increase by just £19 between 2004-5 and 2009-10 - a rise of 7%.

The water company had proposed bills for water and waste services should increase by £47, from £284 this year to £331 in 2010. That represented a hike of 3.3% each year and 16.5% overall.

Last night, Anglian Water, which supplies 4.2million customers, said Ofwat's plans were "very tough and demanding".

It had planned to fund a £1.8billion programme of improvements over the next five years with money from the rises.

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A spokesman added Ofwat's recommendations would be looked at in detail before a response is given on September 15.

The regulator will make a final ruling on the price limits in December - after which firms will have two months to decide whether to accept or challenge them - and the new charges will be implemented on April 1 next year.

Anglian Water bills are currently the second highest in the country but, if the Ofwat proposals are enforced, five other firms will have the same or higher charges.

Essex and Suffolk Water had planned to increase its charges for water supply from £132 this year to £162 in 2010 - a rise of 23% - but Ofwat wants the bills to go up to just £143 - an increase of 8%.

A spokesman for the firm said the original proposed rises were to meet "anticipated obligations" and said Northumbrian Water, its parent company, would now consider the 300-page document from Ofwat.

Ofwat also wants Tendring Hundred Water's bills to drop by £10 by 2010, from this year's £162 to £152.

Andrew Smith, general manager of Tendring Hundred Water, said: "The company will be working closely with Ofwat over the coming months to ensure that service levels can be sustained within the price limits that are ultimately set."

Overall, water bills in England and Wales should rise by an average of 13% over the next five years, which less than half what the industry wanted.

Water companies had wanted to raise bills by an average of 29% - or £70 - to fund almost £22 billion of maintenance and improvement work.

Ofwat said bills should be allowed to rise by 7.6% in the first 12 months, starting on April 1 next year, to reflect a build-up of costs for companies. Suppliers had asked for a rise of 13.4%.

Philip Fletcher, director general of water services, said: "After close scrutiny of the companies' plans, we consider that they can carry out their essential functions over the next five years for around half the average increase in cost to customers which the companies proposed."

Maurice Terry, chairman of WaterVoice, the watchdog for water customers, said: "This is much better news than we had expected and certainly better news then we had feared.

"It is much lower than the industry had asked for but the devil will be in the detail."

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