Are you ready to dive into the latest Editor’s Digest, handpicked by Roula Khalaf, the Editor of the FT? In this weekly newsletter, you’ll find a selection of her favorite stories that are sure to pique your interest.
Here’s a breakdown of the key points discussed in this edition:
- UK water regulator Ofwat has given utilities in England and Wales the green light to increase customer bills by an average of 36% by 2030. This is a larger increase than initially suggested but falls short of the requests from struggling companies like Thames Water. Ofwat’s “final determination” outlines the measures and metrics governing Britain’s privatised water companies for the next five years.
- Ofwat’s Chief Executive, David Black, emphasizes that water companies need to step up to meet this challenge. Customers will rightfully expect significant improvements over time to justify the increase in bills.
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Thames Water was fined £18mn for breaching license conditions due to excessive dividend payments. The bill increases are higher than the 21% average previously indicated by Ofwat. Thames Water is only permitted a 35% increase, much lower than the 53% requested due to its financial struggles.
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Negotiations have been ongoing between water companies and Ofwat regarding bill increases from 2025 to 2030. The industry argues that substantial hikes are necessary to fund essential infrastructure investments.
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Since privatisation in 1989, water companies have had to reach agreements with Ofwat every five years covering bill increases, investment amounts, and investor returns. The crisis facing Thames Water has raised concerns about investor confidence in the industry, putting pressure on Ofwat to reach a resolution.
As the situation continues to develop, it is essential for water companies to demonstrate their ability to deliver real improvements to justify the bill increases. Customers must be assured that their increased expenses are leading to tangible benefits. Stay tuned for more updates on this unfolding story.
Get ready to unravel the complexities of the water industry and stay informed on the latest developments in this evolving narrative. Keep an eye on future Editor’s Digest newsletters for more captivating stories handpicked by Roula Khalaf.
