United Utilities to reduce costs to meet Ofwat's guidelines

3rd Oct 2014 08:10

In response to the draft determination published by The Water Services Regulation Authority (Ofwat), United Utilities has submitted a revised plan for the 2015-2020 period.The proposal would result in average household bills falling by 4.1% in real terms over the five-year period, compared with a 2.3% reduction in its June plan.In August, Ofwat announced that it would reflect part of the company's plan expenditure exclusions as an adjustment to its baseline in the draft determination, with a £1bn gap between the draft determination and UU's initial business plan.The firm added that it would also implement a more cost-efficient policy in its operation, resulting in £280m reduction to its costs, while a further £370m would be cut by a revised expenditure plan.The group said that under their new business plan the wholesale plan expenditures for the 2015-2020 period will be down to £5.52bn from the £5.89bn estimated in June.