Price review background and company plan
On November the 26th 2009 Ofwat (The Water Services Regulation Authority) published its final decision on the prices water and sewerage companies could charge their customers between 2010 – 15. There are 10 water and sewerage companies and 12 water only firms, Bristol Water being one of these.
This was the fourth determination carried out by Ofwat since the system was introduced. Ofwat’s responsibility is to set price limits for each company that allows adequate funding of the capital investment schemes each company proposes whilst taking into consideration expected operational efficiency gains. The process for this review was the same for each company with most companies beginning work on their plans back in 2007.
Bristol Water’s price review process
2007
In December 2007 we published our Strategic Direction Statement (SDS), entitled ‘Water in the Future’. This document detailed our proposed strategy up until 2035 and asked customers, regulators and stakeholders for their views on our plans. The purpose of the document was to set out our strategy for a 25 year period to ensure our shorter terms plans – those covered by the five year periods of each price review – are set in this wider context.
Click here to download and read the SDS
2008
The SDS was published at the start of the price review process and allowed us to take feedback and views into consideration whilst we prepared the detailed plans for our Draft Business Plan which was published in September 2008. This plan set out our initial proposals for investment levels we believed were needed and the likely impact on customers’ bills. This plan encouraged discussion and feedback from customers, stakeholders and regulators to allow us to refine the draft plan ready for our final business plan to be submitted to Ofwat in April 09.
Click here to download and read the Draft Business plan
2009
Our final Business plan was submitted to Ofwat in April 2009. In it we set out our proposed service and investment levels and price limits for the period 2010-1015. The full public plan is below. The press release outlines the plans main themes and objectives.
Click here to download and read our final business plan
Press Release
INVESTING £1M A WEEK IN YOUR SERVICE: FINAL BUSINESS PLAN
Our Final Business Plan is the best way to continue providing an effective and efficient service to you, our customers. It sets out proposed service and investment levels and price limits for the five years beginning in April 2010. You can read a much fuller version of the document attached here. Key points:
- We need to invest over £1 million each week through to 2015.
- Our plan results in doubling the current level of capital expenditure. Our proposals require investment of £319 million in the five years to March 2015. Our proposed investment programme will stop the supply system deteriorating and improve customer service.
- To help fund all this, by 2015 our average household water supply bill needs to rise -- but only by less than £1 a week by 2015 in real terms, up from £3 per week now.
- No increase in prices is ever welcome; there will be customers who find it hard to pay their bills. We are therefore bringing in additional measures to help those with genuine difficulties.
- We are planning to deliver precisely what customers tell us they want and what they are prepared to pay towards. Recent independent market research shows that a clear majority of customers support our proposals, even taking into account the current economic background.
- Our top priority is to provide a safe and reliable water supply on demand in an affordable and sustainable way. We are planning to:
INVEST further in water quality improvements.
CUT leakage by a further 10% by 2015
DELIVER sustainable levels of maintenance of our extensive assets to prevent any deterioration in service.
INVEST more in resilience schemes so we can continue to supply water in the event of a loss of a critical part of our system. We will ensure much greater resilience of service for another 230,000 people by 2015 and 400,000 by 2020.
ENSURE water is available to meet growth in demand at the lowest cost.
BACKGROUND:
- Investment between 2005-2010 has already included: £18m water quality improvements at two treatment works; a £26m scheme to improve security of supply (resilience) for almost 200,000 customers; and £18m on water main replacements or refurbishment.
- We have operated with a restricted level of investment for as long as possible to keep prices as low as we can. More than 20% of our water mains (1,500 kilometres) are already over 100 years old -- amongst the oldest in the country; and over 30% of our pumping plant is over 25 years old.
- Customer reaction to the proposals in our plan
Our latest survey shows strong support for our proposals –
Bill increase of more than £4 per month and see wider improvements to service |
14% |
Bill increases of £4 per month and have service maintained and in some areas improved (as set out in our plan) |
44% |
Bill increases by the minimum of £2 per month but possibly see service deteriorate |
18% |
None of these – presumed as wanting less than £2 per month increase regardless of the impact on service |
17% |
Don’t know |
6% |
This survey is based on a fully representative sample of 867 household customers
Our current levels of service: We were ranked 3rd out of 22 companies in OFWAT’s 2007/8 Overall Performance Assessment. Examples of our standards include:
- 99.97% compliance with water quality standards
- no restrictions on customer use of water for 17 years
- consistently meeting the economic level of leakage target
- strong environmental performance
- 99.9% of metered customers’ bills based on actual readings
- 100% of billing contacts dealt with inside 5 working days
- All written complaints substantively replied to within 10 working days
- telephone calls answered on average in 5 seconds – by humans!
- customer satisfaction on telephone contact rated second highest in the industry for 2008/9
- 87% of our customers rank our service as good or very good.
