Pennon promises customers more involvement with South West Water

Pennon Group subsidiary South West Water released details on its business plan for 2020-25 on Monday, after submitting its Price Review 2019 plans to the regulator Ofwat.

The FTSE 250 company’s water utility operator promised lower bills, improved service, better environmental protection, and a stake and greater say in the company for customers, with an “enhanced opportunity” for extra rewards should South West Water beat its targets.

It said the plan, which it dubbed ‘A New Deal’, followed South West Water’s biggest customer consultation

The plan, which would now be assessed by Ofwat, included proposals to keep the average bill below inflation, delivering a decade of bill freezes, reductions or below inflation rises up to 2025, as well as more pioneering support for those who struggled the most to pay.

By 2025, it said the average bill would be lower than it was in 2010.

South West Water would also spend more than £1bn to improve services, enhance operational resilience and deliver the largest programme of environmental improvements for 15 years.

The company said it would offer customers a £20m shareholding, and a greater say in the business - building on the existing ‘WaterShare’ scheme, first introduced in 2015, which rewarded customers for the firm’s outperformance and protected them from underperformance, with extra investment or even lower bills.

On the environmental front, South West Water also promised increased protection for bathing waters and shellfish waters, and further work in river and reservoir catchment areas to improve raw water quality and natural water storage in the landscape, plus increased protection from flooding and drought through the expansion of flagship catchment management schemes.

It also said it would undertake “major upgrades” of drinking water treatment works, including Stithians, St Cleer, Prewley near Okehampton, and Restormel near Lostwithiel, with a further 15% reduction in leakage pledged.

An expansion of campaigns to reduce sewer blockages and flooding - ‘Love Your Loo’ and ‘Think Sink’ - was also promised, with initiatives planned to ensure zero harmful pollutions by 2025.

Improvements would be made to achieve sector-leading customer service, along with the launch of a water efficiency initiative for unmetered customers.

Finally, South West Water promised no water restrictions and a reduction in supply interruptions.

“Five years ago we set ourselves stretching performance commitments,” said Pennon Group chief executive Chris Loughlin.

“Today, drinking water is top quality, leakage targets have been met, supply interruptions, sewer blockages and flooding have all been reduced and bathing water quality has hit record highs.”

Loughlin said South West Water was “on track” to deliver its 2015-20 business plan, but there was more to do.

“Our new business plan offers all-round improvements in what customers have told us they value most at a price they are prepared to pay.

“As customers have shaped our new plan and will be partners in its delivery, it’s only right that they should be offered a real stake in the business and a greater say in what we do and how we do it.”

He said that was why, in 2020, the group would introduce a “first-of-its-kind” shareholder scheme for customers, and a greater opportunity for them to hold South West Water to account.

“In a natural evolution of our innovative WaterShare scheme, we will continue to share our success with customers.

“The New Deal is the next step forward for us, and represents a big leap forward for the water industry, putting more control into customers’ hands.”