United Utilities, alongside South West Water’s holding company Pennon, said they had agreed the bill rises following negotiations with industry regulator Ofwat last year
Water giants United Utilities and South West Water are raising dividends to investors as they confirmed bill increases of 32% and 23% for customers over the next five years.
Providing services to roughly seven million customers in areas including Manchester and Liverpool, United Utilities, alongside South West Water’s holding company Pennon, said they had agreed the bill rises following negotiations with industry regulator Ofwat last year.
The regulator’s decision, made in December, means the typical billpayer across the UK will see their payments rise by an average of £86 this April and was met with outrage from consumer groups The increases come amid high levels of sewage spills and underinvestment in pipes, sewers and reservoirs over the last decade.
Both water firms say bill increases are essential to fund necessary infrastructural enhancements aimed at curbing pollution episodes. Despite apparent pressures to improve services, both United Utilities and Pennon intend to boost shareholder dividends this year to align with inflation rates.
Chief executive of United Utilities, Louise Beardmore, declared the billing increase would generate £13bn for North West infrastructure upgrades, branding it the “largest investment in water and wastewater infrastructure in over 100 years”.
Pennon, meanwhile, whose companies serve about 1.8 million customers, said it will tap investors for £490m via a sale of new shares. The funds will contribute to a £3.2bn investment in the company’s pipes and sewers over the forthcoming years. Susan Davy, the group’s CEO, stated that the company has “listened to customers” and the increased bills would finance “record levels of investment”.
She explained that the money would be used for “fixing storm overflows, building new reservoirs and creating natural habitats for wildlife”. SES Water, another company acquired by Pennon last year which serves Surrey, Sussex and Kent, plans to reduce bills by 3% over a five-year span.
The firms had the option to contest Ofwat’s decision on bills with the competition regulator, but Wednesday’s announcements indicate they will not do so.