United Utilities Group PLC
23 July 2009
OFWAT PUBLISHES DRAFT DETERMINATION
FOR UNITED UTILITIES WATER PLC
As part of the 2009 water price review process, Ofwat has today published its
draft determination for United Utilities Water PLC (UUW) covering the period 1
April 2010 to 31 March 2015. UUW is reviewing this as part of its ongoing
discussions with Ofwat ahead of publication of the final determination, which
is scheduled for November 2009. A brief summary of Ofwat's key proposals is set
out below.
Capital investment
A total capital investment programme included in the draft price limits of £3.4
billion (in 2007/08 prices), including infrastructure renewals expenditure of £
0.6 billion. This comprises £1.2 billion in relation to the water service and £
2.2 billion in respect of the wastewater service. Of this £3.4 billion capital
programme, investment to meet tighter regulatory quality standards, enhance
service to customers and maintain the supply/demand balance is £1.6 billion.
The remainder of the investment relates to maintenance of UUW's substantial
water and wastewater assets and infrastructure.
The capital expenditure incentive scheme (CIS) ratios are 107 for the water
service and 111 for the wastewater service.
Efficiency
An underlying operating efficiency improvement of 1.8% per annum in respect of
the water service and 2.4% per annum in relation to the wastewater service.
Return on capital
An average real, fully post-tax return of 4.5%.
Customer prices
An average annual real price decrease of 0.6% across the customer base over the
five-year period, with the following profile.
2010/11 2011/12 2012/13 2013/14 2014/15
K factor -6.3 +0.3 +0.6 +0.7 +1.8
This draft determination is available on Ofwat's website at www.ofwat.gov.uk.
United Utilities' contacts
For further information please contact:
Philip Green, Chief Executive +44 (0) 1925 237000
Tim Weller, Chief Financial Officer +44 (0) 1925 237000
Gaynor Kenyon, Communications Director +44 (0) 7753 622282
Darren Jameson, Head of Investor Relations +44 (0) 1925 237033
Rob Hughes, Investor Relations Manager +44 (0) 1925 237019
James Bradley / Tom Murray, Tulchan Communications +44 (0) 20 7353 4200