How Yorkshire Water customers could end up paying £34 less on bills

The Competition and Markets Authority (CMA) has published its findings on the price controls for four water companies, including Yorkshire Water, for 2020-2025.

Yorkshire Water's Lindley Wood Reservoir.

In December 2019, Ofwat published its price controls setting out the total amount water companies can charge for services in 2020-25.

In March ast year, Anglian, Bristol, Northumbrian and Yorkshire asked the CMA to redetermine their price controls.

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The CMA has set a headline rate of return to investors of 3.2 per cent. This is compared with 4.67 per cent in the previous price control period, approximately 3.6 per cent proposed by the water companies and 2.96 per cent proposed by water regulator Ofwat.

It added that the return to investors will be 32 per cent lower than the last price control period, 9 per cent lower than the group’s provisional findings and approximately 12 per cent lower than the rate proposed by the water companies.

As a result of this determination, customers will be spending, on average, £34 less per year on their bills than they were paying in 2019/20. This is a smaller reduction than was proposed by Ofwat, but bills will be slightly lower than set out in the CMA’s provisional findings, in September 2020.

Kip Meek, chairman of the CMA, said: “In coming to our decision, we have sought to balance keeping bills low with the need to maintain a good quality of service and to invest in critical infrastructure for the future. Our decision means that customers of these companies will be paying, on average, £34 less per year for their water than they did in 2019/20.”

Yorkshire Water welcomed the CMA's final determination.

A spokesperson said: “This has been a lengthy and thorough process by the CMA, but one conducted with rigour and fairness.

"Investment by water companies can play a critical role in response to climate change and can also help deliver economic recovery and we now have a conclusion which will help us to play our part.

“We can now draw a line under the last price review and start to work collaboratively with government and regulators to ensure that we restore the balance to the sector and deliver long term resilience whilst protecting customer interests.

“It is also time to look at the regulatory process and see if we can make it simpler and more effective. We are sure that Ofwat shares this aspiration.”


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James Mitchinson