Ofwat Reins in Over-Priced Water Suppliers

Water regulator Ofwat has advised three of Britain's major water suppliers to reconsider what they charge consumers and come in line with the watchdog's price recommendations.

Bristol Water, Thames Water and United Utilities have all received letters from Ofwat saying that they need to prove that their pricing is efficiently calculated and therefore justified.

Ofwat is currently assessing new business plans for water companies for up to 2020, factoring in such things as the cost of constructing the Thames Tideway Tunnel. Ofwat found that Thames Water is charging customers more than double its recommended price for the cost of the construction project, for instance.

Ofwat found that Thames Water is charging customers more than double its recommended price for the cost of the construction project.

Bristol Water was found to be charging 57% above the regulator's recommendations, while United Utilities was found to be 29% higher when it comes to wastewater charges.

"This early notification is intended to protect customers by allowing those companies with very material differences time to reconsider their plans in these areas," Ofwat said in a statement.

"Our current assessment suggests there will be a very material 'gap' between the expenditure sought by the companies and Ofwat's view of efficient expenditure - well above 20%, and markedly above the gaps observed for other price controls," it said.

"While our assessment of all companies' plans is not final, and further refinement of our own modelling could result in changes, in Ofwat's judgement this is unlikely to result in changes sufficient to address the scale of the gap for these price controls."

Ofwat will issue its conclusions on August 29.