February 7, 2015
Burnham-On-Sea water provider challenges Ofwat's call to cut bills

Bristol Water said this week it will challenge an order to reduce its bills over the next five years.

The water regulator Ofwat told the company - which supplies tap water supplies across the Burnham-On-Sea area - that it needs to cut bills by 23%, but the firm argues that this will reduce investment.

It wants a 4.5% cut over the period and is appealing to the Competition and Markets Authority (CMA).

The Consumer Council for Water said it hoped the CMA will reflect what customers want at a price they accept.

The council said it would be asking Bristol Water's customers for their views on Ofwats's decision and Bristol Water's proposals, then sharing the findings with the CMA.

Bristol Water said it had planned to spend £531m between 2015 and 2020 - allowing for an average reduction of 4.5% (£9).

But in its Final Determination, Ofwat said the company's expenditure should be set at £409m and the average bill should be cut to £167 in the first year, followed by four years at £152.

Bristol Water said it did not believe the determination is in the long term interests of customers and believed there is "clearly a discrepancy in calculations".

Bristol Water Chief Executive Luis Garcia said: "The Final Determination makes it very difficult for us maintain our levels of service and make sufficient investment to deliver the enhancements needed to improve and protect the water supply that our customers told us they wanted, for now and in the future."

"Throughout this process we have engaged fully with Ofwat and we have consulted with our customers to ensure that their views and priorities have shaped our Business Plan. We are very confident that our proposals for 2015-2020, combining service improvements and price reductions, meet our customers’ requirements and expectations."

"We do not believe that the determination Ofwat has set is in the long term interest of our customers and stakeholders and we believe that a review by the CMA will result in a better outcome. There is clearly a discrepancy in calculations because of the size of the gap and the CMA is the only fair way to resolve this."

The Final Determination sets the allowed levels of total expenditure and investment companies can make to improve and protect water supplies. It also sets price controls which apply to companies' retail and wholesale activities and determines the level of customers' bills over the next five years.

Bristol Water supplies water to 1.2 million people across the area, including Burnham-On-Sea and Highbridge.

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