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Ofwat today published for consultation draft price limits for the water and sewerage companies in England and Wales for the five years from 1 April 2005. Effect on customers' bills
Benefits
Effect on companies
Explaining the draft price limits announced today, Philip Fletcher, Director General of Water Services, said: "We believe these decisions are fair to customers and the companies, and will benefit the environment. They will enable efficient companies to carry out and finance their services and meet new obligations. "After close scrutiny of the companies' plans we consider that they can carry out their essential functions over the next five years for around half the average increase in cost to customers which the companies proposed. The picture varies from company to company. We have made realistic assumptions about the prospects for further efficiency gains. We have also taken account of unavoidable cost pressures on the industry. "We have made our assumptions on a consistent basis for all companies, recognising their need to raise finance in the markets for major investment programmes. "We have provided for a substantial increase in work on maintaining pipes, sewers and treatment works. We must safeguard water companies' assets and promote secure supplies, both now and in the future. "We have to protect the environment on a sustainable long term basis. 94% of the schemes put forward by companies to enhance the environment and quality of drinking water are included in our draft price limits. The other 6% are not yet included because they fail to meet our criteria or appear to offer very poor value for money. These will be subject to further examination and some may be included when we set final price limits in December. "We have accepted about 80% of company proposals to deal with the scourge of sewer flooding in homes. But by challenging the most expensive schemes we have cut the costs. Companies should be able to resolve the problem for 8,200 more households at risk of internal flooding. "Price increases can present particular problems to customers on low incomes. The challenging but achievable assumptions we have made would protect customers from any unnecessary increase and offer them continuing value for money for the services they receive. Overall by 2009 customers would be paying only around 3% more on average, in real terms, than they were paying in 1999. "Customers and companies will want to consider carefully the draft price limits and the package to be delivered. I shall now take account of all the comments I receive from companies, customers and others, including Ministers in their final guidance to me, before I set final price limits on 2 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 determination document, 'Future water and sewerage charges 2005-10' - Draft determinations', will be available from the Ofwat library on 0121 625 1373 and on Ofwat's website www.ofwat.gov.uk. 3. The figures quoted in all the attached tables are before inflation. 4. Tables 1 and 2 are presented in 2004-05 prices. 5. Representations from water companies are due by 15 September 2004 and from others by 13 October 2004. 6. Ofwat has published ten regionalised press notices to provide more information on our draft decisions: Anglian, Wales, Northumbrian, Severn Trent, South West, Southern, Thames, United Utilities, Wessex and Yorkshire. 7. 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 8. 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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