WICS publishes Draft Determination
30 June 2009
WATER BILLS IN SCOTLAND TO RISE BY LESS THAN INFLATION
The Water Industry Commission today published draft limits for the prices that Scottish Water can charge its customers for water services. Later this year, after a period of consultation, the Commission will set the price limits that will apply from April 2010. The Commission is also proposing to extend the current four-year price control period by a further year, until March 2015.
The Commission proposes that charges for all household customers and for most business and public sector customers would rise annually by, on average, 1.5% less than the rate of inflation. Scottish Water will be expected to continue significantly to increase its efficiency and to improve its customer service.
These price limits would be sufficient to finance a large programme of capital investment – over £200 a year for every household in Scotland and some two-thirds of the average annual household bill – to support economic development and to enhance water quality and environmental performance. This would include finance for significant environmental improvements on the Clyde and elsewhere.
The delivery of the benefits of this programme will be monitored by the Commission and by the quality regulators, the Drinking Water Quality Regulator and the Scottish Environment Protection Agency within a Government chaired output monitoring group.
The programme will require public finance in the form of Government lending to Scottish Water of the order of £140 million a year. If the Scottish Government is unable to make available the required level of borrowing, the Commission believes it could consider using the Scottish Futures Trust as a vehicle for providing finance to Scottish Water or allowing Scottish Water to borrow commercially (along the lines agreed for Network Rail). There would be no adverse impact on customers if borrowing were provided in this way.
The Commission also proposes steps to enhance the unique opportunities that exist in Scotland for new retail suppliers to enter the market – opportunities that have already generated significant benefits to customers and to the environment.
Alan Sutherland, Chief Executive of the Commission said, “This Draft Determination represents a good deal for customers, our environment and our economy. Household customers will benefit from prices that will increase at less than the rate of inflation and from better service. Businesses and public sector organisations should expect more tailored and improved services from their chosen retailer and lower prices.
“Our environment should benefit from a substantial yet flexible capital expenditure programme which allows issues to be addressed in both a timely and effective way. And this capital programme is as large as can be efficiently delivered and is set for up to five years. In this time of uncertainty, this should be good news for Scotland’s economy.”
The Commission welcomes representations on the Draft Determination from all stakeholders by
23 September. It will publish its final decisions on 26 November.
To download a copy of the Draft Determination please visit www.watercommission.co.uk or email [email protected]
For more press information please contact:
Fiona Chow or Emma Ap-Thomas, 3 Monkeys Communications, 020 7009 3100
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 price limits for Scottish Water based on the lowest overall reasonable cost of achieving the Scottish Government’s objectives for the water industry.
2. Responses to the Draft Determination should be sent to: Katherine Russell, Director of Corporate Affairs, The Water Industry Commission for Scotland, Ochil House, Springkerse Business Park, Stirling FK7 7XE.
Email: [email protected] Fax: 01786 462018
3. In November 2005, the Commission determined price limits for water and sewerage services for the regulatory control period 2006-10. Background information about the Strategic Review of Charges 2010-14 is available on the ‘Future prices’ section of the Commission’s website at www.watercommission.co.uk