How does the price review affect my bill?

On 25 November 1999 the Director General of Water Services (the Director) set new price limits for each water and sewerage company for the next five years. As a result almost all customers will see a reduction in their bills for 2000-01, the first year of the new price limits. This leaflet sets out the expected levels of household bills in the year beginning 1 April 2000.

How will the average household bill change on 1 April 2000?

Tables 1 and 2 show the annual average household bills for water and sewerage for 1999-2000 and 2000-01. The tables also show the percentage difference between the two years (excluding inflation) and the percentage increase in bills between April 1989 and March 2000. The annual average household bill includes all customers, with or without a meter. Most households (83%) do not have a meter and their bills are generally based on the rateable value of their property, plus (usually) a fixed charge. Households with a meter pay in relation to the volume of water they use, plus a standing charge.

How are changes in average bills determined?

The annual change that companies can make to bills is limited to the price limit set by the Director, plus inflation. Table 3 sets out the price limits from 1 April 2000. Most price limits are negative, this means that bills are falling.

Will my bill change in line with the price limit set by the Director?

This price limit applies to the average change in charges. Bills for some customers may change by more and some by less than this average. For example, a company may reduce water charges by less than sewerage charges, or reduce the standing charge by more than the volumetric charge. All these individual charges are set out in the companies' charges schemes.

What are the companies' charges schemes?

Within the price limit set, each company is responsible for deciding individual charges. These are published in a charges scheme. This year, for the first time, each company must obtain the Director's approval for its charges scheme. In September 1999, after consulting widely, the Director set out the approach he would take to the approval of charges schemes.

The key principles are:

• that charges should reflect costs - this has meant, for example, that for water and sewerage companies the change in water bills is not always the same as the change in sewerage bills;
• that reductions in standing charges for customers with a meter should generally be greater than reductions in volumetric charges to encourage careful use of water;
• that companies should offer rebates for customers whose properties do not drain surface water to the companies' sewers; and
• that companies should set levels of measured and unmeasured charges to ensure a fair balance of charges.

In line with new government requirements, companies will also offer a special tariff for vulnerable low-income metered customers. This has meant that charges for all other customers are slightly higher than they would otherwise have been.

Companies will also meet their new requirement to install a meter free of charge where this can be done at reasonable expense.

1. Percentage increases exclude the effect of inflation. Inflation, as measured by RPI increased by 51.5% between November 1988 and November 1999 and 1.4% between November 1998 and November 1999.
2. Percentage changes and levels of bills for 1999-00 and 2000-01 are estimates based on provisional and forecast data provided by each company.
3. Percentage changes between 1999-00 and 2000-01 may not calculate due to rounding of the 1999-00 and 2000-01 average household bill.

Company	% change in bills 1989-90 to 1999-001 (excluding inflation)¹²	Average bill for 1999-00 (2000-01 prices)²	Average bill for 2000-01²	% change in bills 1999-00 to 2000-01 (excluding inflation)¹²³
Water and sewerage companies
Anglian Water Services Ltd	13.7	158	144	-9.3
Dwr Cymru Cyfyngedig (Welsh Water)	54.2	168	140	-16.5
North West Water Ltd	61.8	145	119	-17.6
Northumbrian Water Ltd	72.8	144	110	-23.5
Severn Trent Water Ltd	28.2	115	92	-20.2
South West Water Ltd	89.0	240	205	-14.7
Southern Water Services Ltd	47.7	165	148	-10.1
Thames Water Utilities Ltd	41.4	106	92	-12.7
Wessex Water Services Ltd	27.7	149	124	-16.5
Yorkshire Water Services Ltd	40.6	128	109	-14.8
Industry Average	41.6	136	116	-15.1

1. Percentage increases exclude the effect of inflation. Inflation, as measured by RPI increased by 51.5% between November 1988 and November 1999 and 1.4% between November 1998 and November 1999.
2. Percentage changes and levels of bills for 1999-00 and 2000-01 are estimates based on provisional and forecast data provided by each company.
3. Percentage changes between 1999-00 and 2000-01 may not calculate due to rounding of the 1999-00 and 2000-01 average household bill.

Water	£106
Sewerage	£119
Total	£226

Company	Price limit %	Price limit plus Inflation (1.4%)
Water and Sewerage Companies
Anglian Water Services Ltd	-10.0	-8.6
Dwr Cymru Cyfyngedig (Welsh Water)	-10.5	-9.1
North West Water Ltd	-9.3	-7.9
Northumbrian Water Ltd	-19.4	-18.0
Severn Trent Water Ltd	-14.1	-12.7
South West Water Ltd	-12.2	-10.8
Southern Water Services Ltd	-13.0	-11.6
Thames Water Utilities Ltd	-11.7	-10.3
Wessex Water Services Ltd	-12.0	-10.6
Yorkshire Water Services Ltd	-14.5	-13.1
Water Only Companies
Bournemouth & West Hampshire Water plc	-3.0	-1.6
Bristol Water plc	-10.0	-8.6
Cambridge Water plc	-14.3	-12.9
Dee Valley Water plc	-10.6	-9.2
Essex & Suffolk Water plc	-13.8	-12.4
Folkestone & Dover Water Services Ltd	0.0	1.4
Mid Kent Water plc	-19.7	-18.3
North Surrey Water Ltd	-15.0	-13.6
Portsmouth Water plc	-3.0	-1.6
South East Water plc	-16.1	-14.7
South Staffordshire Water plc	-2.7	-1.3
Sutton & East Surrey Water plc	-17.0	-15.6
Tendring Hundred Water Services Ltd	-6.9	-5.5
Three Valleys Water plc	-15.2	-13.8
York Waterworks Ltd	-9.0	-7.6
Industry Average	-12.3	-10.9