18 December 2007
Ofwat has announced that two UK water firms will be allowed to charge their customers more for their services.
However, the regulator said in a statement that it had excluded some costs put forward by Bristol Water and Dee Valley Water as justification for their price increases, which they "strongly challenged".
As a result, the price hikes granted are smaller than those asked for by the two water providers.
Commenting on the decision, Chief Executive of Ofwat Regina Finn said: "Before companies apply for an increase in their price limits they should consider their wider performance against their regulatory targets and the impact of their application on their customers - we will expect companies to apply only after they have offset new eligible costs against any savings made in areas such as the financing and delivery of their capital programmes."
She added: "We will continue to protect the interests of customers by providing a rigorous challenge to monopoly water companies."
The providers had given a variety of reasons to Ofwat for the bill hikes - including greater customer uptake of free metering than had been expected and increased numbers of people defaulting on their bills.
As a result of the regulator's decision, customers of both firms can expect price rises of around £5 over 2004 levels.
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