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Bristol Water bills to fall 16% after competition inquiry ruling

Published 06/10/2015

Bristol Water originally planned to reduce bills by just 6%
Bristol Water originally planned to reduce bills by just 6%

Bristol Water customers will see their bills drop by about 16% over the next five years after an inquiry rejected several of the company's proposed plans.

The company originally planned to reduce its bills by just 6%, but late last year regulator Ofwat said customers should see a cut of 19%, arguing that it had seen no justification for the higher charges and Bristol Water needed to run itself more efficiently.

Bristol Water appealed over Ofwat's decision to the Competition and Markets Authority (CMA), which ruled that average bills must reduce by 16% by 2020.

This means the average customer will be charged £160 a year compared with £187 had Bristol's case been accepted.

Bristol Water said the decision meant it was now unable to build some of its proposed projects, such as the Cheddar 2 reservoir.

However, the company will complete the Southern Resilience Scheme, which it said would bring extra security to its supply to 280,000 customers.

CMA inquiry group chairwoman Anne Lambert said: "We have considered the needs of Bristol Water's customers and the levels of investment required to maintain quality and reliability of supply.

"As part of this process, we have rejected several projects proposed by Bristol Water because we did not consider they were fully justified and in the interests of customers. We have also placed funding for a large water treatment project on hold.

"It is subject to approval by Ofwat if further investigation by Bristol Water justifies the investment. Overall, we considered that a small increase from the Ofwat determination was justified."

Bristol Water chief executive Luis Garcia said: "It has been worthwhile going to the CMA as this is an improved outcome that we are confident will better serve Bristol Water's customers by allowing us to maintain our network and invest in essential improvements."

Ofwat chief executive Cathryn Ross said: "While the CMA has slightly reduced the level of bill reductions we set, this is still an excellent result for Bristol Water's customers.

"It is critical that Bristol Water continues to deliver a safe and secure water service to its customers.

"We hope that Bristol Water will now review its approach to our five-yearly price reviews and take forward these lessons at future reviews."

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