Dŵr Cymru Welsh Water, has today announced that £32 million – the equivalent to dividends paid to shareholders in other companies – will be used to deliver further benefits to customers.

The £32 million is in addition to the previously announced £1 million-a-day capital investment programme (totalling £1.7 billion between 2015 and 2020) and commitment to keep the average household water and sewerage bill below the rate of inflation in every year until 2020.

The company also announced its best overall performance and that it will consult its customers over the summer on how any future financial surpluses could be used.

Welsh Water’s Chief Executive, Chris Jones said:

“Our unique ownership model allows us to use, for the benefit of our customers, money that in other companies would be paid to shareholders. This will help cut our costs – and therefore customers’ bills - by generating more energy on our own sites; by improving the service in areas where we’re having repeat problems; providing additional support for customers struggling to pay; and to help build a new environmental visitor attraction in Pembrokeshire.”

“Customers have indicated that they want to see us strike the right balance between keeping bills low today, improving performance where it isn’t to the standard they expect, and investing now to cut the cost for future customers. The additional £32 million of funding announced today will help us strike that balance and our research shows that customers support this package by four to one.”

“We also believe it is important that customers have a voice in how the value generated by our not-for-profit model is used in the future. We will shortly launch a consultation over the summer months inviting our customers to have their say on this most vital of public services.”

Benefits of the additional £32 million will include:

• Providing financial assistance through the funding of social tariffs for customers who are truly struggling to pay their water bill (with a target of helping 100,000 customers by 2020)
• Additional renewable energy generation and efficiency projects (including hydro, solar, and small-scale wind) in order to reduce energy costs, environmental impact and keep customer’s bills lower in the long term
• Improvements to the water supply network in the Rhondda Valley, including the renewal of 33 km of water main improving water supplies to almost 20,000 properties
• Improvements to the water supply network in north Pembrokeshire, including the renewal of 7 km of water mains and other significant works in the surrounding area to improve water supplies to over 11,000 properties
• £2 million to part-fund the building of a new Visitor Centre and tourist attraction at Llys y Frân reservoir in Pembrokeshire.

The company’s Preliminary Financial Results show strong overall performance - Welsh Water has also reported its best ever environmental performance.

The utility also secured second place in industry regulator Ofwat’s Customer Satisfaction Survey league table for 2015-16 compared with other water and sewerage companies in Wales and England. According to independent benchmarking research conducted by Water UK, Welsh Water also continues to lead the industry in supporting housing development, securing first place for the year as a whole, for both water and sewerage services.

The company is on course to deliver a record £1.7 billion investment programme by 2020 with examples of investment projects including:

• increasing resilience of drinking water for 100,000 customers near Conwy in north Wales through a £31 million investment at Bryn Cowlyd Water Treatment Works
• safeguarding water quality issues in Hereford by investing £5.7 million to replace more than 42 km of old cast iron main which can cause discoloured water
• reducing the risk of local sewer flooding which could adversely impact its customers and the environment by starting work on a further £25 million investment programme in its innovative RainScape programme in Llanelli and Gowerton over the next five years. This follows a £15 million investment in recent years and is aimed at removing more surface water from its combined sewer network
• £2.7 million to increase capacity on the wastewater network in Mumbles which will benefit local bathing water quality
• £1.1 million to replace almost 10 km of water main in Raglan to reduce the risk of discoloured water to customers

Operating costs of £297 million were £2 million higher than in the previous year (2015: £295 million), while the firm delivered a capital investment programme during the year of £279 million (2015: £379 million).

Gearing – total net borrowings as a percentage of regulatory asset value – is down to 57% from 93% in 2001 (2015 – 60%) – Welsh Water owners Glas Cymru has the highest credit rating in the UK utilities sector

Other activities during the year included £15 million invested in Welsh Water’s sustainable drainage programme – RainScape – in Llanelli, Burry Port and Gowerton which offers an innovative solution to tackle urban flooding with the next £25 million phase underway. The firm is also investing £24 million in transforming Five Fords wastewater treatment works into an innovative Energy Park - incorporating solar, advanced anaerobic digestion, wind and hydro generation schemes at the site.

The customer consultation on how surpluses could be used in future years will be launched on July 11th. Further information will be made available closer to the time.