United Utilities invests £80m in bid to avoid hosepipe bans
North West water and wastewater company United Utilities is to spend £80m on measures aimed at avoiding hose pipe bans during extended periods of dry weather.
It revealed in a trading update today that, following this year’s hot Summer when it proposed a hose pipe ban on consumers across the North West, it has decided to act to safeguard supplies.
Today’s statement, ahead of the group’s interim, results on November 21, said: “Earlier this year, the UK experienced a prolonged period of extreme hot and dry weather resulting in exceptional demand from customers.
“To safeguard continuity of supplies to customers and protect our water resources, we expect to invest an additional £80m during the current financial year.
“These measures, together with the cooler and wetter weather in August, avoided the need for any water restrictions.”
The update also revealed that group revenue is expected to be higher than the first half of last year, reflecting the allowed regulatory revenue changes under its five-year business plan with water watchdog Ofwat.
And it said, due to the RPI inflation that is applied to the group’s index-linked debt being lower for the first half of the year, it expects that the underlying net finance expense for the first half of 2018/19 will be around £30m lower than for the first half last year.
Earlier this month the group submitted its proposed business plan for its next five-year period, known as AMP7
This proposes a 10.5% real terms price reduction for consumers, between 2020 and 2025, while also delivering higher standards of service.
United Utilities said it is already delivering a sector-leading customer service and environmental performance.
“We are the top performing water and wastewater company against the Drinking Water Inspectorate’s (DWI’s) overall drinking water quality metric and third against the DWI’s new Compliance Risk Index.
“Our wastewater business has retained 4-star status for the third consecutive year against the Environment Agency’s annual assessment.
“Customer satisfaction has also continued to rise with the most recent UK Customer Service Index placing United Utilities top among all water and wastewater companies.
“This follows our strong performance against Ofwat’s Service Incentive Mechanism (SIM) measure and a continuation of this trend should make us eligible for a SIM reward in AMP6.”
Overall, the group said current trading is in line with the its expectations for the six months ending September 30, 2018.
