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Sutton and East Surrey Water has proposed higher than recommended returns for investors over the 2015-2020 price cycle, with bills remaining constant.
In its revised business plan, submitted today, the water-only company has proposed a weighted average cost of capital of 4.75 per cent, compared to the regulator’s proposed 3.85 per cent. It claims that smaller companies require a higher cost of capital to remain financeable, and says it can back this up with third party research.
It has proposed keeping average bills at their current levels before inflation over the next price cycles. Most other water companies are proposing bill cuts.
The revised business plan includes further evidence and “minor changes”.
Managing director Anthony Ferrar said: “Our business plan matches the outcomes with appropriate ‘measures of success’ and targets for the next five years. These will help provide the necessary protection and transparency for our customers to enable them to monitor our performance and know whether we are meeting expectations, exceeding them or falling short.
“Our revised business plan has been discussed with and reviewed by our Customer Challenge Group and we believe it provides a good and fair deal for customers while maintaining our ability to continue to improve our performance and provide long term stability.”
Ofwat will issue its draft determination on the plan on August 29.
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