Severn Trent, the water supplier to 8 million Britons, today wrote to its industry regulator asking it to change new licence proposals.
Ofwat had said it wanted to sever the link between water firms’ prices and inflation, and warned that any suppliers which disagreed faced referral to the Competition Commission. However this week the regulator softened its view, saying “flexibility” was needed.
Today Trent said whilst it was “minded to accept” Ofwat’s proposed change to its licence, “the company believes it would be better if the current proposals were modified.”
Ofwat initially suggested water firms would be able to retain the link between prices and inflation for the wholesale part of their business, with it broken for retail operations. Today Severn Trent responded: “The company has made constructive suggestions to overcome concerns regarding the prospect of losing 40% of revenue from wholesale price controls and lack of clarity about how future prices would be controlled.
“The company believes that these suggested changes would still give Ofwat the flexibility required to drive the significant reform of the industry which Severn Trent continues to be supportive of.”
Shares in Severn Trent slipped 8p to 1562p.
