Water companies United Utilities and South West Water have confirmed bill increases of 32% and 23%, respectively, over the coming five years.
United Utilities, serving seven million customers in Manchester and Liverpool, and Pennon, the parent company of South West Water, have agreed to the bill increases negotiated with regulator Ofwat in December.
While the companies could have appealed Ofwat’s decision to the competition regulator, Wednesday’s announcements confirmed they would not.
The regulator’s decision means the typical billpayer across the UK will see their payments rise by an average of £86 this April.
The increases come amid high sewage spill rates and underinvestment in pipes, sewers, and reservoirs over the last decade.
The companies argue that bill increases are necessary to fund infrastructure improvements aimed at reducing pollution incidents.
However, United Utilities and Pennon also plan to raise shareholder dividend payouts this year in line with inflation.
United Utilities’ boss Louise Beardmore said the bill hike would raise £13billion to invest in its infrastructure across the North West. She said the total was the “largest investment in water and wastewater infrastructure in over 100 years.”
Pennon, which serves about 1.8 million customers, plans to raise £490million from investors through a new share sale.
It said the money will go towards a £3.2billion investment in its pipes and sewers over the coming years.
The group’s chief executive, Susan Davy, said the company has “listened to customers” and that the bill rises will pay for “record levels of investment.”
She said the money would be used to “fix storm overflows, build new reservoirs, and create natural habitats for wildlife.”
The smaller SES Water, which Pennon also bought last year and serves Surrey, Sussex and Kent, will reduce bills by 3% over the five-year period.
