United Utilities Water Limited (LON:UU.) submitted its business plan covering the 2020-25 period.
Highlights of the proposal
· 10.5% reduction in real terms in average bills between 2020 and 2025
· Balanced outcome delivery incentive (ODI) package with range of outcomes estimated at plus or minus 2% of return on regulated equity across AMP7, equivalent to around +/-£410m
· Reduction of over £1bn in expenditure compared with AMP5
· Bold strategy of innovation with further advancements in Systems Thinking capability
· Delivering a major water resilience scheme with estimated construction costs of over £750m in AMP7 and AMP8 to be directly procured for customers in Manchester and the Pennines
· Adopting an RPI-stripped appointee cost of capital of 2.4% consistent with Ofwat’s early view
· Leading the industry in operational, corporate and financial resilience
Steve Mogford, United Utilities Water, Chief Executive Officer, said:
“Our business plan sets out our ambition to build on our achievements in AMP6 and deliver a better quality, more reliable water and wastewater service for customers in the North West of England to 2025 and beyond. We are cutting bills such that they will be lower in real terms in 2025 than they were 15 years ago, whilst also delivering higher standards of service, increasing resilience, delivering innovation and investing for the long-term.
“We exit AMP6 as a high performing, responsible company and have submitted a plan for AMP7 that delivers for customers, aligned with the key PR19 themes. Our plan represents the next step towards our vision to be the best UK water and wastewater company and has benefited from extensive engagement with customers and other stakeholders in our region. We are excited about what it means for AMP7 and beyond and we are confident that this is a very high quality and ambitious plan, rich in content, with a compelling proposition of bill reductions and service improvements.”
