Anglian Water plans 36% price rise for consumers

Anglian Water and Northumbrian Water have announced proposed water charge price rises of 36 per cent and 39 per cent respectively in real terms as part of their draft business plans for the five years from 2005. The draft plans form the initial stage of the water regulator Ofwat's five-yearly review of pricing limits for UK water companies.

Both companies propose significant capital investment which would be paid for by the large hikes in customer charges. To meet objectives of greater water quality and security of supply, Anglian yesterday announced plans to spend £2.7bn on upgrading its network.

The company is under pressure to comply with recent and prospective legislation to improve water quality and this has added to the capital expenditure requirements of water operators. The planned expenditure would be met by a £101 rise in the average annual household bill to £379.

Anglian's proposals follow last week's announcement by Northumbrian Water, which said it planned a 39 per cent rise in the average annual household bill from £206 in 2004/05 to £286 in 2009/10.

WaterVoice Eastern, the independent water customers' watchdog for the Anglian region, said it would "look to Ofwat to set demanding efficiency targets for companies so that price increases are kept to a minimum".

By the end of the week, Ofwat should have received all of the water companies' proposals and will begin the lengthy process of review and consultation.

There would already appear to be some divergence in pricing proposals. Severn Trent Water plans to increase prices by a comparatively modest 18 per cent; Thames Water expects to see its annual bills rise by 20 per cent from its current annual average household bill.