By Selina Williams
LONDON -- The U.K.'s water regulator said it would keep consumers' water bills flat for the 2010 to 2015 period, allowing for investment of over £22 billion ($36.79 billion) in the sector -- the largest ever.
The decision by the Water Services Regulation Authority, or Ofwat, means the average bill across England and Wales will decrease by £3 to £340 by 2015 before inflation. That is about £34, or 10%, lower than companies' proposals.
The news pushed shares of U.K. water companies higher. Severn Trent PLC was up 3.7%, United Utilities Group /zigman2/quotes/203908003/delayed UK:UU -0.95% PLC gained 2.3%, Pennon Group PLC advanced 2.4% and Northumbrian Water /zigman2/quotes/209265718/delayed UK:NWG +2.73% PLC climbed 5.5%.
"There's more to this than just low bills, it's about what customers get for their money," said Ofwat Chief Executive Regina Finn . "We've scrutinized every pound in the companies' plans to make sure they deliver what customers want. At a fair price.
"We're allowing companies to invest more than ever before, £22 billion. We're making sure it's invested in the right place, at the right time, for the right price. Everyone will see real benefits from these proposals," Ms. Finn added.
Every five years Ofwat sets the amount by which water companies can increase customer bills. Companies have to decide whether to accept the price limits Ofwat sets, or to seek referral to the Competition Commission. The new price limits will come into effect on April 1, 2010.
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