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thomas davison

Water bills set to soar in more misery for families after gas and electric hikes: Suppliers claim new industry rules will push up prices�Bills will rise by �33 each year until 2045 with average bill �1,000 higher
�Water industry needs to fund a �90billion upgrade of the system
�Regulator pushing through changes to way companies charge for supplies
�Water companies have criticised the measures and 'lack of clarity'

By Peter Campbell
PUBLISHED: 00:55, 24 November 2012 | UPDATED: 00:56, 24 November 2012

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Millions of families could see their water bills soar over the next three decades because of meddling by the industry regulator, Britain�s biggest water companies warned last night.
The predicted increase means bills will rise by �33 each year until 2045 � so the average bill will be �1,000 higher.
Homes across the country are already facing the biggest squeeze in living standards for a generation, with most braced for inflation-busting hikes in the price of heat and light before winter sets in.

Money worry: Water bills may soar over the next three decades because of meddling by the industry regulator
And now it is feared domestic water bills will rise as well, if changes demanded by industry regulator Ofwat are forced on suppliers.
The water industry needs to fund a �90billion upgrade of the system, involving essential work to plug leaks and to ensure drinking water reaches homes safely.

More...�More than 2.6m households are 'overwhelmed' by bills and rising fuel costs are piling on the pressure
�More than 2.6m households are 'overwhelmed' by bills and rising fuel costs are piling on the pressure

Firms will need to borrow the bulk of the money from banks or raise more capital from their shareholders.
At the same time regulator Ofwat is pushing through changes to the way companies can charge for their supplies � which the firms claim could end up adding �20billion to the cost of interest on the loans. At the moment, the regulator sets a maximum price ceiling for water bills overall.
Under the changes, it would set a separate limit for each element of the bill, such as sewage, running call centres and maintaining pipes.
Critics say this will make the regime much more complicated, making it harder for banks to predict their revenue streams � thus increasing the interest they charge. This will be passed on to consumers in the form of higher bills.

Upgrade: The water industry needs �90billion to fund essential work to plug leaks and ensure drinking water reaches home safely
Manchester-based United Utilities, which with three million customers is one of the country�s biggest suppliers, criticised the measures as �not in the best interests of customers, investors and wider stakeholders.�
It added that the uncertainty could hit customers� bills.
Fellow provider Severn Trent said it was worried by the �lack of clarity� of the planned new regime, while South West Water lambasted the plans as �not in the long term interests of customers�.
Industry body Water UK said: �Companies have considered these proposals carefully.
�The majority of companies have been unable to accept Ofwat�s proposals in their current form due to widespread concern within the industry about their potential impact on investor confidence.�
Last night almost every water supplier in England and Wales rejected or criticised the planned reforms.
Of the 20 suppliers in England and Wales, it is believed that only the smallest two providers � Cambridge Water and Portsmouth Water � accepted the measures without reservations.

Industry regulator Ofwat is pushing through changes to the way companies can charge for their supplies
Experts said the moves would add up to �20billion to the cost of financing the upgrade. This would have to be passed on to customers, meaning bills would be �1,000 higher by the end of the reforms, industry insiders say.
The current average family bill is �380 a year, which would then rise by �33 each year on top of inflation � the equivalent of 9 per cent this year.
By 2045 it would leave many homes paying more for their water than they currently do for their gas and electricity combined.
Dieter Helm, a professor of economics at Oxford and a government adviser, warned the rising costs to the industry �dwarfed� any benefits Ofwat�s reforms would bring.
And Neil Griffiths Lambert, of rating agency Moody�s, previously told MPs studying the proposals that the changes could increase borrowing rates by as much as 4 per cent � potentially adding �80 to bills a year.
A spokesman for Ofwat said: �Our regulation since privatisation has helped deliver �108billion investment, and without our challenge bills would on average be �120 higher.
�These proposals will help us to meet emerging challenges, while continuing to make sure customers get a fair deal.
�To do this, we will make sure we continue to safeguard what investors value, so bills can be kept down for customers.
�We now need to look at companies� concerns about our proposals, and consider our next steps.�

Newest Oldest Best rated Worst rated . View all ..The water industry has no interest in spending money on expanding rainwater capture and storage; in fact such projects are prohibited. The grand plan is to create artificial water shortage and increase prices.
- .Why, with our own managed natural resource, do we pay almost twice as much as a country like Singapore, who has none - except for lots of uncollected rain? Renationalisation must be the answer
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