YORKSHIRE Water must justify its proposals for an inflation-busting increase in prices by spelling out the benefits extra investment will bring to its customers, said a watchdog group.
The company wants to increase average bills by 5.4% between 2010 and 2015 to help pay for a proposed £1.9bn investment in water quality, measures to tackle flooding in customers’ premises, and improve the state of rivers and beaches.
The Consumer Council for Water said the average water and average bill could rise from £312 to £317 by 2015.
It acknowledged that the company’s proposals would lead to prices rising only slightly above inflation. However, with the current rate of inflation at 4.8%, this could still result in water and sewerage bills which are unaffordable for many customers it claimed.
Yorkshire Water claimed the near £2bn investment would put just £2 a year on customers’ bills over the five-year period.
The proposed price hikes are being published as part of Yorkshire Water’s draft business plan, which will be used as a starting point for talks to agree water prices up until 2015. The exact amount that Yorkshire Water will be allowed to raise prices by will be decided by the economic regulator, Ofwat, in November 2009.
Andrea Cook, who chairs the Consumer Council for Water Northern, said: “We recognise that some of the work which Yorkshire Water needs to carry out by 2015 is mandatory and necessary to ensure that customers get the safe, reliable service which they value.
“We believe that customers will be concerned with any price rises, especially in light of other household bill increases.
“Even a small increase above inflation will have a big effect on poorer customers who may already be struggling to cope with bills. Customers will, therefore, want to see the justification for any proposed price increases and to understand what they will get for the extra money.”