OFWAT summarises water bill increases

21/02/2006

Household customers in England and Wales will see an average increase of 5.5% (including inflation) in their water and sewerage bills from April 2006, Ofwat announced today.  Customers' bills will rise by an average of £15, from £279 to £294.

The above inflation price increases are necessary for water companies to meet the rising costs of delivering safe, clean drinking water to homes, taking away waste water and making improvements to the environment and customer service.

The increases are in line with the price limits that Ofwat set in December 2004. Changes to individual customers' household bills will vary according to which company supplies them. For example:

• United Utilities' customers will see an average increase of £22 in their bills to reflect the company's current investment programme for improving the network of pipes, sewers and treatment works.

• On average, customers of Dwr Cymru will see a bill increase of £18.  This includes the effect of Dwr Cymru's 'customer dividend' worth £19 per customer (£9.50 each for water and sewerage).  The dividend reflects the benefit to customers of the company's 'not-for-profit' business structure. Dwr Cymru paid a similar customer dividend of £18 for water and sewerage customers in 2005-06.

• South West Water's customers will see average increases in their bills of £39 to help pay for the essential investment the company has committed to make over the five year period 2005-10.  But this increase in bills will be offset by a one-off £20 payment to each household customer, which the company has decided to make as a result of its refinancing plan.

• Thames Water customers will see average increases in their bills of £12, after higher rises last year.

• Average bills for Anglian Water customers will increase only in line with inflation by £7.

These averages reflect the changes in bills seen by customers who are metered, unmetered and those who are expected to change to a meter during the year.

Some unmetered customers, especially those with low water use living in homes with a high rateable value, would pay less if they had a water meter. Companies will be able to provide further information on the effect that switching to a meter will have on bills.

Director General of Water Services Philip Fletcher said:

"I realise that these bill increases will not be welcome, but I want to reassure customers that bills are going up by no more than is necessary.  Price rises are unavoidable because of rising costs and the new challenges facing water companies. 

"The price increases should also secure the progress customers have already seen and enable companies to make further improvements to water quality and the environment and significantly reduce flooding from sewers in the future."

Ofwat will publish its annual 'Water and sewerage bills 2006-07' leaflet shortly which will explain how the bills are calculated.  The price limit for the following year, 2007-08, indicates a £7 increase on average for England and Wales, plus inflation.

 Note:  Bills for 2005-06 and 2006-07 are estimates based on provisional forecast data provided by each company, for the years ending 31 March.  To calculate the total average bill, you must add the average water bill to the average sewerage bill.  Your water and sewerage services may be provided by different companies.  Changes may not equal the sum of their component parts due to rounding.

The average bills for Dwr Cymru reflect the rebate given to customers in both 2005-06 and 2006-07 (£18 and £19 respectively for a customer taking both water and sewerage services from Dwr Cymru).

Notes to Editors:
1. The Director General of Water Services is the current economic regulator of the water and sewerage companies in England and Wales.  He exercises his powers in a way that he judges will allow them to carry out their functions properly, and finance them. His duties include protecting the interests of consumers, wherever appropriate by promoting effective competition.  He will be succeeded by the Water Services Regulation Authority on 1 April 2006.
2. The actual increase in bills includes inflation of 2.4% (November 2005 RPI).
3. The leaflet 'Water and Sewerage Bills 2006-07' is expected to be available on the Ofwat website at www.ofwat.gov.uk on 1 March and from the Ofwat library 0121 625 1373 from 8 March 2006.
4. To help customers understand why bills have gone up, we have produced individual company briefing sheets, which are now available on our website.
5. Attached table - Average household bills for 2006-07 - shows the average across all customers for each company, including both metered and unmetered customers

MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1416/1496/1442.

Out of hours enquiries to: 07884 117 760 or 07778 160 806.  Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk