Water bills are regulated by Ofwat. The regulator sets price limits on how much water companies can charge customers through a five-yearly price review process. This ensures a balance between affordability, investment in new infrastructure and meeting environmental responsibilities.
Every year, customer bills are based on this agreed increase, plus the effects of inflation, and adjusted according to the company's performance in the previous year.
Although we are one of the most efficient companies in the industry, as assessed by Ofwat, we are not immune to the substantial increase in energy costs that has emerged since 2022.
We use a significant amount of energy to transport our treated water to homes and businesses in our region, and therefore, we required additional funding to deliver against this need. We also needed additional funding to help us cover the cost of the chemicals we use to treat raw water and the pipes we lay.
In our plans, we have challenged ourselves to deliver further efficiencies over the 2025-30 period, which will help to partly offset the impact from energy costs.