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Bristol Water wins Ofwat price battle

Bristol Water this week won a small increase in the price water regulator Ofwat allows it to charge customers.

The Competition Commission has provisionally decided that Bristol Water can raise its bills by an average of 2.3% a year after inflation. Ofwat had originally allowed only a 1.7% rise, and Bristol Water had sought an annual rise of 6% after inflation.

A Competition Commission spokesman said that, if the provisional decision becomes official it will be the first time for at least six years that a water company has succeeded in its appeal against the regulator’s decision.

A “milestone”

Bristol Water said the finding was a milestone in a lengthy process.

It added that it “is studying the findings carefully and will need time to analyse them fully before making any detailed response”.

Further hearings on the matter will be held next month and a final re-determination will be announced by the Competition Commission in August. Ofwat referred the appeal from Bristol Water to the commission earlier this year.

Bristol Water appealed against Ofwat’s price determination for the AMP5 period between 2010 and 2015 in January. It said it would be unable to maintain and replace deteriorating infrastructure adequately. Ofwat had excluded spending on three resilience schemes totalling £25M and a £3M project to return a water source back to use.
Bristol Water forecast that the outputs Ofwat demanded would cost £290M, but Ofwat only approved £244M of capital expenditure.

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