Written - Announcement of the Final Determination (final price limits) for water and sewerage bills for 2010 - 2015

The “Final Determination” for water and sewerage bills for the 2010 – 2015 period was released today (26 November 2009) by Ofwat, the economic regulator for the water industry in Wales and England.

The final determination sets the price limit that water companies can charge customers for their water and sewerage services.

This is the closing stage in the periodic review process, which is the mechanism through which water and sewerage bills are set by Ofwat based on water company business plans. I informed you in July of this year Ofwat’s “Draft Determination”. Following the announcement of the draft determination there followed a consultation and negotiation period between Ofwat and the water companies which also allowed for interested parties to comment on the draft determination. Ofwat takes account of the comments received and additional information when setting the final determination.

The final determination reflects the outcome of a two year process of developing business plans, evidence gathering, customer research, assessment and discussion, involving Ofwat, the water companies, Environment Agency, the Drinking Water Inspectorate, the Consumer Council for Water, the Countryside Council for Wales and English Nature and the Welsh Assembly Government and UK Government.

The Welsh Assembly Government has given Ofwat a clear steer on the priorities that the periodic review process should provide for.  Our Strategic Policy Position Statement on Water, which was issued in March 2009, made it clear that our core principles for water are to ensure access to safe drinking water, maintaining water and sewerage services at an affordable price and compliance with statutory obligations that drive all round water quality.

I have also issued to Ofwat statutory Social and Environmental Guidance in February 2009, which sets out the Assembly Government’s priorities in relation to affordability, sustainable development, innovation and goals outlined within the Environment Strategy for Wales.  Ofwat are required to have regard to this guidance while conducting their duties.

The key points to note in the final determination for water companies operating in Wales are:

Dwr Cymru Welsh Water 

• The average household water and sewerage bill will reduce in real terms from £404 in 2009-10 to £374 in 2014-15.
• This is a reduction of 7%.
• Dwr Cymru Welsh Water were the only water and sewerage company in England and Wales not to propose an increase in bills.

Dee Valley Water

•  The average household water bill will increase in real terms from £128 in 2009-2010 to £130 in 2014 – 2015.
•  This is an increase of 2%.
• The water bills for Dee Valley will remain amongst the lowest compared to other water only companies.

Severn Trent Water (N.B. Regulated by Secretary of State for EFRA but operates in parts of Wales)

• The average household water and sewerage bill will reduce in real terms from £304 in 2009-10 to £291 in 2014-15.
• This is a reduction of 4%.

Full details of Ofwat’s draft determination can be found at:-

http://www.ofwat.gov.uk/