Water charges could be cut by 6%

SWW had wanted a 6% rise in bills

Water users in the South West could see bills fall by about 6% over five years - about £30 off an average bill, under a regulator's plans.

Ofwat is considering curbing South West Water's (SWW) spending plans and reducing consumers' bills between 2010 and 2015.

SWW, which supplies Devon, Cornwall and parts of Dorset and Somerset, had proposed a 6% rise in bills.

Ofwat will make its final ruling on SWW's plans in November.

SWW wanted the increase to continue its work to improve the supply and sewage networks, as well as allow higher returns to cope with the impact of recession.

SWW customers simply won't tolerate any bill increases Steve Hobbs, Consumer Council for Water

Its planned rise would have seen bills go up to an average of about £490 a year, per household.

But Ofwat's draft said it wanted to see a cut of 6% on current prices, taking out the impact of inflation, and setting prices at about £460 by 2015.

Bills for SWW's customers are the most expensive in Britain because of the region's relatively lower population and bigger coast line, compared with other water company areas.

The average household water and sewerage bill in England and Wales for 2009/10 is about £342.

Following the initial decision, the regulator will consider representations from all water companies over the coming months before giving its final verdict on prices in November.

Steve Hobbs, policy manager for the Consumer Council for Water in the West, said the news would be welcomed by customers, but that that the pressure need to be kept on Ofwat to ensure that it acted on its recommendations.

He said: "As welcome as the announcement is, the final decision won't not be made until November.

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"We'll continue to press the case to Ofwat that they need to continue to listen to customers.

"They need to continue to look at customer research which shows that SWW customers simply won't tolerate any bill increases, especially in the current economic climate."

SWW said it was "very sensitive to issues of our customers around price and affordability".

However, Customer Service Director Monica Read added that the regulator was asking the company to invest £100m less than it had planned and it was trying to figure out why.

She said: "We put forward what we thought was a balanced, sensible plan and we stand by that plan.

"But we need to understand where Ofwat thinks we can do things for less, why they think that, what things they don't think we need to do, but we think that we need to do, and which areas of the business are affected."

Shares in South West Water's owner, the Pennon Group, fell by just under 4% after the announcement.

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