United Utilities agrees watered-down Ofwat proposals

UNITED Utilities, the North West water provider, has agreed a new licence after months of discussions with the regulator Ofwat.

After a major revolt by many of the country’s water providers, Ofwat has backed down. It had had wanted to move parts of their businesses — representing about 40% of revenues — from the price control framework from 2020, creating uncertainty over the level of returns.

The companies argued his could increase the cost of capital and raise consumer bills.

In a statement, Warrington-based UU said that after “constructive discussions” with Ofwat and other water companies, it had accepted revised proposals put forward by the regulator on December 21.

The company said: “The board of UUW considers that the revised licence amendments have reduced uncertainty for investors and customers, compared with the previous proposals issued on October 26  2012.

“These revised licence proposals provide for the changes required to facilitate the forthcoming price review in 2014 and set a framework for progressive evolution of regulation in the sector.”

Under proposals which will come into play in several years, UU and other water providers fill face competition in the provision of water services to businesses, but not consumers.

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