Tariff freeze for householders and businesses until 2015
South West Water is to freeze all its standard tariffs and standing charges for consumers and businesses until April 2015 and is also proposing to keep average bill rises below inflation to 2020.
The Exeter-based water and sewerage company is the first in the UK to freeze tariffs for all of its 800,000 customers in 2014/15. Otherwise, customers may have faced rises of four per cent - a £22 increase on the average annual household bill - under the price limits previously agreed in 2009.
This year, the South West was the only region in the UK to see bills tumble - by 7.3% - thanks to the £50 Government contribution for all household customers. The Government has indicated its intention to renew the reduction on an annual basis to 2020.
As part of its WaterFuture investment plan for 2015 to 2020, the company is also proposing to improve services with no overall average bill rises before 2016 and below forecast inflation increases to 2020.
Chief Executive Chris Loughlin said: "We've talked to thousands of customers and businesses to prepare the best investment plan we can and they have told us consistently they don't want to see any erosion in services but are worried by rising household bills now and in the future.
"We can help all household and business customers now by not putting a penny on any of our standard water and sewerage tariffs and standing charges until April 2015.
"We have also re-examined every last detail of our Business Plan to squeeze out more savings while still delivering the improved services and infrastructure homes and businesses need. In addition to next year's tariff freeze, we now propose to keep the average bill the same to 2016 and keep overall increases below inflation until 2020."
Regional business and consumer champions have welcomed the tariff freeze.
Charles Howeson, Chair of South West Water's independent WaterFuture Customer Challenge Panel, said: "This is great news for customers. We're pleased they have been heard and the company has done something to help everyone while not cutting services and still investing in the region for the long term."
Tim Jones, Chairman of Devon and Cornwall Business Council, said: "I'm sure thousands of businesses looking at their energy costs will breathe a sigh of relief and welcome this.
"It's also great to see a company creating new apprenticeships and planning to invest hundreds of millions locally which will support more than 6,000 jobs in the region. This demonstrates that South West Water is a listening business."
Consumer debt advisor Steve Meakin of Plymouth Citizens Advice Bureau said: "Freezing water prices will mean one less thing to worry about for the thousands seeking help from us. South West Water already has some of the best assistance measures for those most in need but we're glad to see them going farther and helping all their customers."
On 2 December, South West Water will formally submit its WaterFuture Final Business Plan to Ofwat for determination in summer 2014.
Highlights of the plan include:
- A £50 million scheme to replace the Crownhill Water Treatment Works with a cutting edge new works serving Plymouth and the surrounding area
- Early investment to protect regional tourism by ensuring all bathing waters affected by the company's sewer network reach the European Union's new higher standards
- An expansion of its award-winning Upstream Thinking programme to restore wetlands and control future treatment costs together with a new Downstream Thinking scheme to cut the risk of sewer flooding and overflows
- Targeted local investment to minimise risk of odours from sewage plants and drive down occurrences of discoloured tap water
- A drive to fix bursts quicker and maintain the company's industry-low leakage rates
Notes to editors
- The tariff freeze has been achieved through reducing revenues earlier than planned rather than delaying to 2015
- It applies to all standard water and sewerage tariffs and standing charges to 31 March 2015. It does not apply to extra services such as new connections which are charged at rates to reflect their cost. For more information please go to www.southwestwater.co.uk/freeze2014
- How much each customer pays depends on their services and volume of water used or rateable value ('water rates') of their property. Metered customers pay more if they use more water even though the unit price per cubic metre has been frozen
- The average annual water bill in 2014/15 will actually fall to £495 due to customers using less water and/or switching to a meter which on averages reduces bills by £400 per customer
- The £50 Government contribution to all householders but not commercial customers was introduced in April 2013 and is expected to be renewed on an annual basis to 2020 to reflect the £2 billion plus high cost of environmental improvements in the South West since 1989 falling on a small customer base
- Today, South West Water's parent group Pennon also announced its half year results for the six months ending 30 September 2013. Pennon announced profits before tax for the half year were up 3.5% to £110 million. South West Water reported a 7.6% rise in its profits to £87.3 million. Viridor's profits were down 28.8% to £15.3 million.
Published: 28 November 2013
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