26 January 2010

South Staffs Water has today confirmed that it has accepted Ofwat's Final Determination, and as such will not be referring the regulator's decision to the Competition Commission for re-examination.

The 5-year price limits (changes in customer bills) for the period 2010 to 2015 are +2.8%, i.e. around 0.6% per year. Customer bills will also change in line with the annual inflation levels that prevail.

The average household water bill in 2010-11 will be £124, which is likely to be around 22% less than the national average. South Staffs Water is a water-only company. We collect sewerage charges on behalf of Severn Trent. The combined water and sewerage bill will be the lowest in the country.

The slight increase in customer bills arises because:

• Over the 2010-15 period, we are going to invest approximately £135m in capital expenditure, which is 15% more than current levels. This will be spent on things such as installing more customer meters, meeting our leakage target, investing in our pipe network and finding and fixing bursts. This investment equates to £248 per property over the 5 years. 
• We are also facing rising operating costs over the five year period for things such as rising power prices. The Company's electricity charges are over £6m a year due to the need to pump water around the network.

Despite these cost pressures, water bills for South Staffs Water customers will remain much lower than the national average due to our efficient operations and a reduction in profit levels for the year 2010/11.

South Staffs Water's strategy continues to be to offer the best value for customers combined with the highest levels of service.