Households will benefit from a £14 fall in average water bills to £330 before inflation over the next five years.
The 4% fall was proposed in industry regulator Ofwat’s ‘draft determination’ on price limits for water and sewerage costs in England and Wales for the 2010-15 period, scuppering plans by the water companies for above inflation price hikes of around £28.
Ofwat chief executive Regina Finn said: ‘We understand times are hard and we have listened to what customers have told us.
‘They want a safe, reliable water supply at a reasonable cost. People can shop around for the best deal on many things, but not water.’
You can use less water by choosing more water efficient appliances. Our water saving products guide looks at water saving washing machines, dishwashers and showers.
The regulator – who will make its final decision on prices in November – said its proposals would still allow water companies to ‘invest extensively’ in the network and spend almost £21 billion over the five-year period.
More than £4 billion will be invested in improving drinking water and protecting the environment, and investment will also reduce the risk of extreme weather – such as 2007’s floods – disrupting supply for around 10 million people.
Meanwhile, according to a separate report, installing water saving measures could save homes £225 a year on water and energy bills. You may be able to make further water savings by following our guide to using less water.
Thames Water – the UK’s biggest water company with more than 13 million customers – had asked for a 17% real terms rise in bills over the next five years in its final business plan.
Ofwat said this would have meant average bills of £356 by 2015 and has instead called for prices 15% lower than requested by Thames Water at £304 before inflation is taken into account.
Thames Water chief executive, David Owens, warned: ‘It’s early days but initial indications suggest today’s draft determination may not allow us to deliver what our customers want in the future. This means we won’t be able to reduce leakage at all over the next five years.’
South West Water – the country’s most expensive water company due to its large stretches of coastline – has also had demands for higher bills reined in by the watchdog. South West’s owner, Pennon, said it was ‘reviewing the package’ proposed by Ofwat.
Visit Which?’s to find out how to use less water in your home.
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