YORKSHIRE Water has bowed to customer pressure to cancel an above inflation increase in prices next year and pledged to keep bills at a lower level until 2020.
The water firm had previously agreed with industry regulator Ofwat that the average household bill could rise to £379 next year, but it has decided to forego the planned £6 increase and stick with an increase in line with inflation.
This means the average Yorkshire bill next year will be £373, some £19 lower than the national average. The current average customer bill in Yorkshire is £368.
Yorkshire Water’s chief executive Richard Flint said: “We’re listening to our customers and the cost of living debate. We’ve taken a hard look and decided to halt the price hike and keep it at that level for the next five years.”
The shortfall will be made up by cutting the dividend paid to investors. Last year’s half-year dividend of £129m has been cut to £69m.
“Everyone has to take a share of the pain and investors are no different,” said Mr Flint.
“It’s a tough environment. One of the advantages of having a close relationship with investors is we can explain the context and they get it. It’s not an easy conversation, but we need to face the realities of the economic situation.”
The move follows pressure from Ofwat to reduce price increases amid fury about ever rising utility bills at a time when people are having to choose between feeding their families and heating their homes.
Unlike other utilities, the water industry appears to be listening to customer demands.
Earlier this week Yorkshire Water’s North West counterpart United Utilities also cancelled a planned hike in bills to keep them in line with inflation.
On Monday, Yorkshire Water will announce it plans to keep bills at this lower level from 2015 to 2020.
“Yorkshire Water’s bills are already some of the lowest in the industry. We’re the fourth lowest in the country,” said Mr Flint.
Consumer watchdog, the Consumer Council for Water, said: “This customer-focused decision by Yorkshire Water to limit price increases for next year, at a time when consumers face economic pressures from all directions, is welcomed.”
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