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United Utilities (UU) has unveiled a package of support worth over £280 million to extend schemes by the company to help customers struggling to pay their water bills and enable them to offer assistance to more than 200,000 households.
Alongside its full-year results, the company announced that shareholders will contribute £142 million, whilst £139 million will be provided via UU’s social tariff.
The company exceeded its outperformance estimate for 2021/22, earning £25 million from outcome delivery incentives (ODIs) for the year. It now expects to earn £200 million from ODIs over the whole of AMP7 – one-third higher than it forecast last year.
On the support being extended to more households in the face of the cost-of-living crisis, Louise Beardmore, customer service director and chief executive designate, said: “We continue to play our part in helping anyone who is struggling to pay their water bill, providing our customers with a range of support from reduced tariffs, payment matching schemes as well as funding an independent charitable trust.
“Despite the high levels of inflation, we are keeping the average water bill flat this year so we can play our part and help every household across our region. Helping customers quickly is important and we have dedicated teams on hand to help anyone who may be struggling. Our investment in Open Banking technology means that we can make it easier for customers to access support in minutes rather than weeks.”
UU also announced it will increase its investment beyond the scope of its 2019 final determination by another £400 million, bringing the total additional spending for AMP7 to £765 million.
The company said it expects to recover £265 million of this through regulatory mechanisms. Part of the £265 million falls under the company’s green recovery spending that Ofwat has allowed to be fully recovered from customers. The rest will be recouped through the regulatory sharing mechanism. As a fast-tracked company with a 50:50 split, the funding recovered from customers will be matched equally with a contribution from UU.
Of the £765 million of additional investment during AMP7, £200 million will be directed towards sewer flooding and water quality, including into dynamic network management to reduce sewer flooding and pollution incidents.
A further £250 million will be invested into environmental improvement schemes including boosting river health.
Additionally, £265 million will be targeted towards other projects such as the Water Industry National Environmental Programme (WINEP).
Looking ahead to PR24, the company’s statement said it anticipated “significant” investment will be required to achieve the ambition of reducing the risk of harm from sewer overflows, especially because UU’s region has a high proportion of combined sewers. Investment during this period is designed to increase resilience in the sewer network, and to improve prediction and prevention of incidents from network-wide sensors.
Revenue for the year increased by 3% to £1,808 million, driven by non-household consumption returning to pre-pandemic levels. The company’s reported return on regulated equity (RoRE) was 7.9% on a blended RPI/CPIH basis, which was double the base return.
Net losses on Water Plus, the joint venture with Severn Trent, stood at £2 million, which is an improvement on the previous year’s net loss of £9 million.
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