Three Valleys Water - Price Review

How much will prices increase?
Water industry regulator Ofwat has set the price that Three Valleys Water can charge it’s customers (as of April 2005). The new charging limits will see an increase in the average household bill in real terms of 17% over 5 years. At present the average bill is £118, by 2010 it will be £138 (excluding inflation). At this price, water will still cost less than a 1p for 10 litres.

How will this increased revenue be spent?
The prices Ofwat have set will enable the company to invest in the region of £300 million improving our service to customers over the next five years. The breakdown of expenditure is listed below – although our aim with all projects will be to deliver them even more cost effectively.

£34 million	Installing 130,000 water meters and 70,000 optional meters.
£130 million	Replacing or refurbishing 640km of water mains that have reached the end of their useful lives.
£9 million	Improving water quality by installing new treatments at five sites.
£27 million	Improving security on company sites and parts of the water supply network.
£5 million	Eight partnership projects with the Environment Agency to monitor river flow to measure the environmental impact of abstraction in dry weather.
£14 million	Developing new water resources, transfer capability and new properties .
£97 million	Updating surface equipment such as water towers, boosters and pumps, electrical panels, membrane filters, IT, vehicles, offices etc.

Why are you increasing the price of tap water?
During the next five-year period, Three Valleys Water needs to make substantial investments in order to take urgent action to ensure that we can continue to provide a reliable supply of high quality tap water for our customers in the future.

Key challenges facing us include:

	operating in a very dry region (South East England receives 50% less rain fall on average than the rest of the UK).
	highest water consumption per household in the country - our customers use on an average 191 litres of water per person per day.
	500,000 proposed new houses envisaged in Government plans.
	at least one water source is lost every year because of pollution.
	our ageing infrastructure is in need of a major overhaul.

How do the price rises benefit customers?

	A reliable water supply in the area for the future.
	Reduced likelihood of low-pressure problems or hose-pipe bans at peak times.
	A reduction in supply interruptions and traffic disruption caused by bursts or leaks.
	Continue to meet the high level of demand for water.
	Newly installed treatment equipment will maintain and improve water quality.

The monitoring plan below is the final version as supplied to Ofwat (dated 7 April 2005).

	Click here to view the monitoring plan outlining Three Valleys Water's overall company strategy for 2005 - 10 and beyond (PDF 772KB)
	Click here to view some useful links

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