Ofwat’s draft determination confirms extent of price rises in Wales
Thursday 11th July, 2024
Ofwat have today published their “draft determination” for water companies in Wales and England. This is part of the regulatory process whereby water companies’ business plans are assessed to ensure they deliver improvements for customers and the environment.
The first thing to note is that bills are set to rise steeply for water customers in Wales.
By 2029/30, customers of the smaller of the two Welsh water companies, Hafren Dyfrdwy, will see their bills increase by £128Â to £524 per household per year, the third biggest rise across England and Wales.
However, Welsh Water customers will be paying £137Â more (in line with Welsh Water’s proposals), which will take their bills from the 4th most expensive now to joint highest alongside Southern Water at £603.
High water bills in Wales will only be justifiable if we also see a corresponding step change in improvements for rivers.
Afonydd Cymru would support a higher customer bill to deliver much needed infrastructure improvement, but only if it also results in meeting the kind of environmental performance we expect from water companies.
Welsh Water were downgraded to 2-star performance last year and missed four out of the seven targets set by the regulator. We need to see the step change in improvement we have been calling for.
Amongst others, Ofwat have set targets for the number of pollutions (-30%) by 2029/30 and serious pollution events (0). Numbers of both have recently been rising in Wales. Natural Resources Wales’s latest report of both Welsh water companies’ performance later this month will tell us if they are moving in the right direction on pollution incidents.
Ofwat have stated that their plans are ambitious and focus on high priorities for the environment. Yet, they have rejected Welsh Water’s seemingly sensible proposals for tackling first the sewer overflows (which aligned with Welsh Government ambitions) that are causing most ecological harm. Instead, their ambition gives us a target in Wales for sewer overflows which is five-years behind their expectations for England.
Ofwat has rejected Welsh Water’s seemingly sensible strategy of prioritising storm overflows that are causing the greatest environmental harm.
With these increases in charges we would expect significant improvements to Welsh rivers. If not, water customers have every right to be discontented. Ensuring these improvements are delivered is also the job of the regulators: Natural Resources Wales and Ofwat.
Ofwat’s draft determinations are now out for review before a final decision in December. We will be delving into the huge amount of detail and providing a response before the end of August.