Anglian backs consumer power

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The Independent Online

Business Editor

Anglian Water yesterday proposed giving consumers a more direct role in setting water prices, by establishing what it called customer forums.

Reporting profits last year 4.3 per cent higher at pounds 125.8m, Robin Gourlay, chairman, suggested it was time for the regulatory regime governing water companies to broaden the role given to consumers.

At present, Ian Byatt, the water regulator, appoints customer committees for each water company to help him in his deliberations. But Mr Gourlay believes it would be better to have water consumer bodies with a degree of independence similar to that given to organisations such as the National Consumer Council.

Mr Gourlay admitted that one of the reasons for opening up the regulatory process to consumers was that Anglian believed its customers were willing to back a higher level of capital investment even at the expense of an increase in prices.

When the company asked Mr Byatt to approve an extra pounds 250m of investment as part of the last price review in the water industry, he disallowed all but pounds 50m. Only the cost of approved investment can be reflected in water prices.

Anglian also rejected Mr Byatt's call last week for the water companies to share more of their profits with customers, in a clear indication that he would prefer lower dividends and more price reductions. It raised the interim dividend 11.25 per cent, nearly twice the increase in earnings per share of 6.5 per cent.

Alan Smith, managing director, said "We don't agree with that."

Anglian's customers had indicated in a survey that polled 3,000 people that they preferred investments and improvements to price cuts.