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In isolation this revision would have the effect of increasing the average annual draft price limit by 0.3% from 2.7% to 3.0% over 2005-10.
Thames Water will have spent considerably more capital expenditure in 2000-05 than was assumed when price limits were set in 1999 in order to improve its water service network. Where very significantly more is spent than was assumed at the previous determination, as is the case for Thames, it is Ofwat policy that companies and their shareholders must bear the costs up to a certain point but after that, then further costs would be allowed in price limits. The original draft price limits did not properly do this. Thames Water was the only company where this adjustment applies. The correction does not affect any other company's draft price limits. When final determinations are made, there are likely to be other issues to take into account for Thames as for other companies. These will arise, for example from representations from companies and customers, and the final Ministerial guidance. So this correction should not be taken as an advance indication of the final determination figure. The closing stages of the periodic review are as set out in our published timetable. We are expecting companies' representations on the draft price limits by 15 September and those from the other stakeholders by 13 October. We will announce our final decisions on draft price limits in the light of these representations on 2 December 2004 Notes for editors 1. The Director General of Water Services is the 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. 2. Draft price limits were published for consultation on 5 August 2004 and are set out in 'Future water and sewerage charges 2005-10 : Draft determinations'. 3. MD191 'Our conclusions on rewarding outperformance and handling underperformance' was published in March 2004. MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1416/1496/1442 Out of hours enquiries to pager: 08700 555 500 water 503/509. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk  | ||||||||||||||||||||||||||||||||||||||||||||||||
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