Water consumers face inflation-busting price increases

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Water companies have today defended the proposed inflation-busting price rises included in their draft business plans.

The Consumer Council for Water (CCW) warned that consumers in some regions would see their bills spiral by up to 40%.

South West Water was among those companies named by the CCW, with average metered water and sewerage bill increases from £373 in 2009-10 to £421 in 2015. Unmetered water and sewerage bills on the other hand could rise by 40%, from £677 in 2009-10 to £951 in the same period.

South West Water cited higher energy and operating costs, and work needed to replace and renew water and sewerage infrastructure for the price increases.

Thames Water's business plan showed an average bill increase of 16% above the rate of inflation by 2015 which would see the average water and sewerage bill in the region rise from £280 in 2009 to £329 by 2015 before inflation.

Their reasons include new European Union and UK government policies on water conservation, the cost of installing water meters as part of a more intensive metering program, and work needed to further reduce leakage.

Thames Water CEO David Owens defended the increases: "We're committed to providing the best-in-class water and sewerage services for our customers at prices they can afford.

"In drawing together these plans we've undertaken the most extensive public consultation in our history. Our customers have told us what they want our priorities to be, and what they would be willing to pay for. What we have produced reflects these views.

"Thames' customers have enjoyed the lowest bills in the industry for many years, but we now need to make essential investment to secure their services for the future."

Ofwat last year asked companies to produce 25-year plans for maintaining and developing services. Each company has been challenged to set its five year business plan in the longer term, demonstrating how it will deal with issues such as climate change, sustainability and meeting consumer expectations.

Ofwat CEO Regina Finn said: "This is the start of the process of making decisions on how each company proposes to provide value for money, long-term, high quality water services to its customers. We will now examine draft business plans in detail, checking the proposed level of service and investment. Final decisions will not be made until autumn 2009."