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Ofwat today published draft price limits for United Utilities Water for the five years from 1 April 2005. Ofwat's proposals would lead to an average increase in bills of £47 to £315 over the five years, before inflation. This compares with the company's proposal for an increase of £101 over the period. However, in the first year, from April 2005, the average increase would be only £2 before inflation. This would be followed by bigger increases in subsequent years to reflect the impact of costs on the company. Ofwat has closely scrutinised the company's plan. It believes that these proposals would strike a fair balance. Customers should pay no more than is necessary for the company to continue to deliver safe, reliable and efficient services, and for further investment to improve the quality of drinking water, to clean up rivers and estuaries and to help deal with the problems of sewer flooding. They would enable United Utilities Water to invest more than £2.4 billion to carry out, for example, work to:
Philip Fletcher, Director General of Water Services, said: "I believe that these proposals are fair to customers and to the company, and would benefit the environment. Although the average rise in bills for United Utilities' customers would be more than the £33 average bill rise for England and Wales as a whole, I am convinced that after reviewing the company's business plan carefully it is necessary. It is essential to maintain a water service in which customers can have confidence. "Much of the increase is needed to safeguard essential water and sewerage services and to make the further improvements to drinking water and to the environment that the Government wants to see delivered. The increase would also help to maintain secure supplies for customers now and in the future. Customers of United Utilities would by 2009 be paying 16% more on average, before inflation, than they were in 1999. "We have worked hard to protect customers from unnecessary bill increases and ensure that water companies continue to offer them value for money for the services they receive. "We shall consider carefully all the comments which we receive before reaching conclusions on our final price limits in December." 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. The draft determinations document, 'Future water and sewerage charges 2005-10' - Draft determinations', will be available from the Ofwat library on 0121 625 1373 and on the website at www.ofwat.gov.uk 3. The figures quoted in all the attached tables are before inflation. Average household bills in both tables are presented in 2004-05 prices. 4. United Utilities was allowed an increase in its price limit to 8.9% from 4.5% in 2004-05 following an interim review. This has reduced the price limit that the company would otherwise have been allowed in 2005-06. 5. Representations from water companies are due by 15 September 2004 and from others by 13 October 2004. 6. Ofwat also published today new research into the impact of internal and external sewer flooding on customers. The publication, 'Customer Research 2004: Survey of customers affected by sewer flooding', will be available from the Ofwat Library on 0121 625 1373 and on the Ofwat website, www.ofwat.gov.uk Media enquiries to Ofwat Press Office on : 0121 625 1416/1496/1442. Out of hours enquiries to pager: 08700 555 500 water 503/509.  | ||||||
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