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Ofwat examines company bid to increase customers' bills |
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Friday, 19 September 2008 |
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Ofwat is examining an application from Sutton and East Surrey Water to raise the prices it charges customers in 2009-10.
Under the terms of its licence, the company can ask Ofwat to review its prices to customers if it believes that an unforeseen circumstance, which could not have been avoided by prudent management action, is having a substantial effect on its financial position. Sutton and East Surrey Water says that it has experienced:
Regina Finn, Ofwat Chief Executive Officer, said:
"We are very concerned to see Sutton and East Surrey Water looking for permission to increase their customers' bills substantially in 2009-10.
"The process of examining this application will now start. The onus is on the company to convince us that its customers should face higher bills. Any price increases must be fully justified in the light of Sutton and East Surrey's financial circumstances."
Ofwat will scrutinise the company's application and consult on its draft decision in early November. It will announce its final decision in December. Any changes to prices will apply to water bills from April 2009 and will be taken into account when Ofwat sets prices for the company for 2010-15.
Sutton and East Surrey Water is a water-only supplier, providing water to parts of Surrey, Sussex, Kent and the London boroughs of Merton, Sutton and Croydon. It supplies 257,000 domestic properties and around 19,000 non-domestic properties. In August the company published its draft business plan. In this it proposes price limits for each year 2010 to 2015. These proposals may now need revisiting in the light of the outcome of this application.
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