Press Releases 2009

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Water prices in Scotland kept below inflation until 2015

26 November 2009

 Water Prices in Scotland Kept Below Inflation Until 2015
• Households, the public sector and businesses will benefit from a price freeze next April
• Scottish Water is being financed to deliver the investment objectives of the Scottish Government
• Customer service will improve to match that provided by the top performing companies in England and Wales
The Water Industry Commission for Scotland (WICS) today announced that charges for households, the public sector and businesses would increase at five per cent below inflation over the next five years. There will be a price freeze in April 2010 and, subject to inflation, the prospect of a further freeze in 2011. Thereafter, charges would increase at less than the rate of inflation between 2012 and 2015.
Many public sector and business customers may be able to negotiate an even better deal under the retail competition framework, or reduce their bills by helping Scottish Water to lower its costs.
Scottish Water is also required to reduce its leakage by at least a third by 2014 and to investigate reducing the volume of ground water unnecessarily entering the sewage system.  It is being financed to deliver a further large capital programme to:
• Improve Glasgow’s drainage;
• Meet important and urgent needs identified through robust studies from unallocated investment of £180 million;
• Invest in renewable energy.
The financial position of Scottish Water should remain robust, boding well for future charges. Charges would not be affected by any changes in Scottish Water’s financing arrangements.
The Final Determination also finances a number of other initiatives to encourage a greener water industry. These include:
• Household metering trials, including the use of different tariffs;
• Work with landowners to manage water catchments; and
• Support to property developers in introducing more sustainable practices.
Alan Sutherland, Chief Executive of WICS, said: “We are pleased that our Final Determination offers some good news to customers during continued global economic uncertainty but, at the same time, allows for a sustainable future for the Scottish water industry.
“Scottish consumers will see their charges kept at levels below inflation over the next five years but also see a marked improvement in customer service and the public health and environmental improvements which will benefit Scotland for many years to come.”

To see the Final Determination in full, please visit www.watercommission.co.uk
ENDS
For more press information please contact:
Duncan Mackenzie-Reid or Jeremy Durrant, College Hill, 020 7457 2020 or on mobile 07807 239 764/
07792 918 648  [email protected]
Katherine Russell, WICS’ Director of Corporate Affairs, 01786 430 200

Notes to editors:
1. The Water Industry Commission for Scotland is the economic regulator of the Scottish water industry. It has a statutory duty to determine charges caps for Scottish Water based on the lowest overall reasonable cost of achieving the Scottish Government’s objectives for the water industry.
2. The Commission issued a Draft Determination of charges caps from 2010 to 2014/2015 in June.  It has subsequently considered the representations it received from various parties, including Scottish Water.  It has modified the draft charges caps in the light of these representations and further information, including the additions made by the Scottish Government to the obligations placed on Scottish Water.
3. The annual water and sewerage charge for a Band D household will remain unchanged at £394.  A Band A household will pay two thirds of this amount and a Band H would pay twice this amount.
4. For comparison of charges with England and Wales and numbers published by Ofwat, the annual water and sewerage charge for an average Scottish household on the basis of information currently available, would fall to £304 from the current level of £320 by 2015 – this does not include the impact of retail price inflation, which could increase the actual amount paid by the customer at that time.
5. Scottish Water has until 26 January 2010 to decide whether to accept these charges caps or to have them redetermined by the UK Competition Commission.
6. Alan Sutherland, Chief Executive, comments on the Final Determination from a personal perspective on his blog at www.watercommission.co.uk/blogs

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