Water prices capped

Ofwat has published draft proposals for the prices UK water and sewerage companies can charge their customers between 2010 and 2015. Its proposals will see household bills remaining broadly stable until 2015.

Every five years, Ofwat sets limits on the prices water and sewerage companies in England and Wales can charge customers. Its draft proposals follow the submission of water companies' final business plans in April.

The regulator's scrutiny of companies' business plans will see the average household water and sewerage bill reduced by around four per cent, or £14 to £330, by 2015.

According to Ofwat, water companies will still be able to invest extensively. Almost £21bn will be pumped into helping maintain and improve services to consumers.

Flooding in 2007 highlighted the risk extreme weather conditions pose to water supplies. The proposed investment will see this risk reduced for around 10 million people.

More than £4bn will be invested in maintaining and improving drinking water quality, as well as protecting the environment. This will help deliver cleaner wetlands, rivers and beaches.

Regina Finn, Ofwat chief executive officer, said: 'People can shop around for the best deal on many things, but not water. That's why we've challenged the companies' plans rigorously to ensure that customers get the best value for money from the £21bn of investment. Our proposals allow the companies to build on the successes of the past, keep bills broadly stable and create a better environment.

Companies, customers and interested parties now have the opportunity to present their views on Ofwat's proposals. Final limits on the prices companies can charge will be published in November. New bills will then come into effect in April 2010.