South West Water accepts Ofwat price settlement
South West Water said it would not take its latest price settlement to competition authorities despite several utilities saying they planned to do so.
The company, owned by Pennon Group, on Friday said it had made its decision “after careful consideration”. Thames Water, Anglian Water and Northumbrian Water were expected to join Yorkshire Water and Bristol Water in applying to the Competition and Markets Authority in challenging their five-year price settlements.
Companies have until Friday to post a challenge and if they do it will be the first time in 20 years that they have taken on industry regulator Ofwat. The pushback from regulators comes after criticisms of the industry over billions of pounds in dividend payments to overseas investors and high levels of executive pay.
The settlement covers how much water companies can charge customers and how much they must spend on infrastructure such as sewage treatment over the next five years.
Thames Water was set to challenge Ofwat's demand to deliver £10bn of improvements while cutting bills by 7% per cent or £28 a year over the next five years to £361.
Anglian has ordered to cut bills by 10% over five years, or £44, to £378 a year. Northumbrian faces price cuts of 26% or £110 a year to £319 per household.
South West said that by 2025 customer bills “will be lower than they are today and lower than they were 15 years earlier”.
The company became only the fourth of the UK's 17 water companies to publicly accept the settlement so far, joining Severn Trent, United Utilities, and Wessex Water.