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All 23 water companies in England and Wales have agreed to work within new price limits set for them by Ofwat for 2005 to 2010. The companies had two months to decide whether to ask the water regulator to refer their price limits to the Competition Commission for redetermination. All of the companies have decided against a referral. Companies indicated that this was 'a tough call' and that they face significant challenges in meeting Ofwat's efficiency targets. The price limits mean that average household bills will rise by 18 per cent over the next five years (before inflation). But this is less than two-thirds of the increase sought by the water companies in their business plans. The increase is necessary in order to safeguard essential services and to further protect the environment. Most customers will see their bills rise more steeply this April than over the following four years. This reflects the build up of companies' costs since the last price review in 1999. Welcoming the companies' decisions, Philip Fletcher, Director General of Water Services, said: "I am pleased that all the water companies have decided against challenging what I believe are fair and balanced decisions. The efficiency targets we have set them are demanding, but I am convinced they are both achievable and desirable. "At the same time they will protect customers against unnecessary increases in bills and safeguard the progress that companies have already made to improve customer services and the environment. The price limits provide for further investment in environmental and water quality improvements and in reducing the problem of sewer flooding." Notes to 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. All companies have the option to ask for referral to the Competition Commission if they do not agree with Ofwat's price limits. If the Commission, whose decision is final, had changed price limits for any company, the change would have affected bills from April 2006 but would have taken into account the change to bills from April 2005. 3. Ofwat published its price limits for 2005-10 on 2 December 2005. See PN 55/04. The document Future water and sewerage charges 2005-10: final determinations is available on the Ofwat website. MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1416/1496/1442 Out of hours enquiries to pager: 08700 555 500 water 503/505. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk  | ||||||
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