Water to cost customers an average £6.50 a year more

The company says the 4.7% a year increase is meet to meet the level of spending on the company water supply operations to 2.1 million customers in Sussex, Kent and parts of Hampshire, Berkshire and Surrey.

South East Water has outlined how it intends to maintain and improve services to its 2.1 million customers between 2010 and 2015.

The company's five-year draft business plan '“ and the likely impact its proposals will have on customers' water bills - has been submitted to industry regulator OFWAT and is now open for public consultation.

Publication of the draft business plan is the first step of a formal process that will see Ofwat setting the water bills from April 2010 until March 2015.

The company says money raised from water bills will allow it to develop new sources of water, increase the number of customers on a metered supply, provide new and improved treatment processes to safeguard drinking water supplies, as well as maintaining and improving its network of pipelines and pumping stations.

The company's plan also takes account of the 25% increase in new houses planned across the company's supply region over the next 25 years, and growing water use by existing customers, which is driving much of the extra investment which needs to be made.

To meet this demand, South East Water is proposing a capital programme of 600m between 2010 '“ 2015, a spend of over 2m every week during the five year period.

The company is facing unprecedented increases in power costs '“ these are expected to rise from the current 9 million per year to 18 million per year from 2010 onwards.

This is due to the cost of power in the current market, and not because the company is using more power in its water supply operations.

Managing director Paul Butler said: "We are very conscious that no price rise is likely to be welcomed by our customers, but unfortunately this rise is largely the result of unprecedented increases in power costs, and the continuing cost of maintaining our day-to-day water supply operations.

"Between 2000 '“ 2010 we will have invested over 650 million to maintain and improve levels of service and drinking water quality. If this work is to continue, and we need to supply more water to more customers, then water bills have to rise to meet the increasing cost of doing so.

"However, it is important to note that the increase over the whole five year period represents 13 pence per week extra on our average water bill.

"We are committed to providing customers with high quality drinking water services but at prices that represent good value for money. Therefore, we must always consider our investment plans against the overriding need to moderate prices to our customers, and this draft plan outlines how we intend to do that."

A final decision on South East Water's business plan will be made next year when OFWAT sets the level of water charges for customers from 2010 to 2015.

Meanwhile, customers can obtain a copy of the plan or comment on it by writing to South East Water, Rocfort Road, Snodland, Kent, ME6 5AH, or by visiting www.southeastwater.co.uk/about/library.asp to view the document.