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Ofwat approves price increases for Bristol and Dee water

Ofwat has agreed to raise price limits for two water companies from April, but by less than the companies wanted.

Bristol Water proposed an increase of 5.6% in customer bills, while Dee Valley Water proposed an 8.1% increase.

Ofwat concluded that excluded costs were not justified. It is now seeking views on its draft decisions.

Ofwat chief executive Regina Finn said, "We limit the bills customers pay upfront when setting price limits by excluding costs that are uncertain.

"These two companies, Bristol Water and Dee Valley Water, are now facing costs that are both substantial and meet the strict qualifying criteria for changing customers' bills.

"We will now consider the views of customers, the two companies and other stakeholders on these draft proposals before we make our final decisions.

"Ofwat will continue to look after customers' interests by providing a rigorous challenge to monopoly water companies.

"But the companies should also look after their customers by applying for bill increases only after they have offset new costs against the savings made in areas such as the financing and delivery of their capital programmes.

"This will ensure that consumers continue to receive high quality services at a fair price," she said.

Under Ofwat's proposed changes, the average water bill for Bristol Water customers would rise in real terms by up to 4.6% or £4 more than previously set. By 2009-10 the average household bill will be around £143.

Customers of Dee Valley Water would see their average water bill increase by 4%, or £3 in real terms more than previously set. By 2009-10 the average household bill will be around £121.

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