Plan for £1.3 billion improvements with 1.3% rise in average bills

31/07/2008

There will be modest increases in customers’ water bills and a large increase in investment to maintain and improve services from April 2010 to 2015 if plans to be submitted to the regulator Ofwat are approved, Northumbrian Water announced today.

The plans are set out by Northumbrian Water in its stock exchange Interim Management Statement and in a separate summary extract of its draft Business Plan which are both released today.

They reveal a proposed programme of investment from 2010-2015 of £1.3 billion – an increase of 22% on the amount invested between 2005-2010.

This increase is needed to maintain company-wide assets and for major projects. In the North East it is particularly needed to reduce sewer flooding and, in the southern business of Essex & Suffolk Water (ESW), for raising the level of Abberton reservoir, near Colchester, to meet drinking water demand.

Average annual price increases for customers in the North East and in ESW will be 1.3% above inflation.

Bills are set so that customers in the North East do not subsidise investment in ESW or vice versa. In the North East the average increase in prices for water and sewerage services will be 0.7% above inflation and in ESW, where the company delivers only water, it will be 2.8%.

Excluding inflation, customers in the North East will be paying less in 2014-2015 than they did in 1999-2000. In ESW, an increase is needed for significant investment to ensure security of supply.

The company has already decided not to use the full price increases allowed by Ofwat for the three years 2007-2010. As a result, bills will be 2% lower than they could have been by 2010.

Average household bills (2007-2008 prices)

From 2010-2015 Northumbrian Water will:
· improve the customer experience when they need to contact the company
· further reduce discoloured water complaints in the North East
· improve satisfaction with the taste and odour of drinking water
· secure water supplies in Essex as the population grows
· further improve river and bathing water quality in the North East
· reduce flooding from sewers in the North East
· protect operational assets from flooding
· reduce energy use and carbon emissions to combat climate change

Managing Director John Cuthbert said:  “Our proposals provide important benefits for customers.  We are able to announce plans for a significant increase in investment with modest price rises that, we believe, most customers will continue to find both affordable and excellent value for money.”

For further information contact Alistair Baker on 0191-301-6851.

Document	PDF
Looking to the future - Draft Business Plan - Summary