South West Water yesterday presented Ofwat, the independent water industry regulator, with updated plans that could see average prices falling by 13 per cent in real terms by 2020.

The firm has already confirmed a price freeze on its standard tariff and standing charges to April 2015 and previously proposed to keep average bill rises below inflation to 2020. In addition, bills already include a £50 annual reduction from Government to 2020.

South West Water submitted its 2015-20 business plan to Ofwat in December last year, following its biggest ever consultation, a public approval rating of 84 per cent and the support of the independently-chaired WaterFuture Customer Panel.

Following new evidence on the cost of financing, the company said it has now proposed even lower bills than before.

As well as pegging prices, South West Water also plans to spend £868million on improving services in 2015-20. This represents an increase in investment of 19 per cent over the current five-year regulatory period.  Planned investment includes a new high-tech water treatment works in North Plymouth, further improvements to drinking and bathing water quality, and the development of innovative water catchment solutions.

The latest plan, which is subject to regulatory approval, follows the decision by South West Water to accept an invitation from Ofwat to adopt new regulatory guidance that balances the interests of customers and investors, keeping bills as low as possible and the investment flowing.

South West Water Chief Executive Chris Loughlin said: 

"Our business plan got a big thumbs up from customers who helped to shape it, and it has been praised by the regulator. It represents a real partnership with the communities we serve. We recognise that hard-pressed households and businesses want value for money and continued investment in services and the environment. We look forward to delivering on their behalf."

Ofwat will confirm whether the plan is enhanced on 4 April 2014.  The regulator has stated that it will then 'fast track' a draft determination for enhanced plans by 30 April 2014 as part of a price-setting process.

Click here to access South West Water's revised plan.