{"text":[[{"start":9.93,"text":"Five of Britain’s water companies spent £32.4mn on an appeal to the competition regulator that resulted in the utilities being able to raise customer bills even higher."}],[{"start":23.33,"text":"Anglian Water, Northumbrian Water, South East Water, Southern Water and Wessex Water argued that regulator Ofwat’s decision to allow them to increase consumer bills by an average of 24 per cent before inflation by 2030 was insufficient to cover their costs and attract investors to the industry."}],[{"start":45.48,"text":"The appeal to the Competition and Markets Authority cost Anglian Water £9mn; South East Water £9mn; Southern Water £7.6mn; Northumbrian Water £3.7mn; and Wessex Water £3.1mn, according to documents released by the Competition and Markets Authority."}],[{"start":66.56,"text":"The CMA also spent £5.2mn and Ofwat £3.2mn, taking the total spent on the appeal to more than £40mn. "}],[{"start":78.34,"text":"Water companies in the UK are regional monopolies which rely on customer bills to cover their costs. Every five years Ofwat sets out how much they can charge."}],[{"start":89.73,"text":"That process costs the utilities a total of around £250mn for this five-year period even without the CMA appeal, according to industry lobby group Water UK, which argues that the system has become overcomplicated and expensive."}],[{"start":107.62,"text":"Ofwat initially ruled in December 2024 that the five companies could impose an average rise of 24 per cent. The companies then appealed to the CMA, which in March 2026 allowed them to raise customers’ bills by an extra 2.2 per cent on average, or a total of £463mn in extra revenues. "}],[{"start":132.75,"text":"The five water companies argued that Ofwat’s price increases were insufficient to attract investors to raise equity and pay dividends, according to several of the companies’ submissions to the CMA."}],[{"start":145.89,"text":"This would mean they would struggle to get the investment grade ratings from credit agencies that are needed to reduce borrowing costs and to avoid breaching Ofwat’s licence conditions, the companies said."}],[{"start":159.57999999999998,"text":"Several water companies are financially stressed after the 16 water utilities raised a total of £82bn in debt and paid out £85bn in dividends between privatisation in 1991 and March 2025, according to research by the FT. "}],[{"start":178.80999999999997,"text":"According to a previous CMA report in 2021, around 20 per cent of customers’ bills go towards servicing the debt and providing a return to shareholders."}],[{"start":189.90999999999997,"text":"Thames Water, which is relying on a £3bn loan from its creditors to keep afloat, also argued that the price increases were too low but has not yet appealed to the CMA. It has been allowed by Ofwat to defer a potential appeal indefinitely and has struck an agreement that it can raise bills higher if it can find the supply chain to improve its infrastructure. "}],[{"start":214.09999999999997,"text":"A downgrade of Thames Water’s debt by rating agencies in July 2024 put the utility in breach of its operating licence and it is now receiving extra supervision under Ofwat’s special measures regime."}],[{"start":229.37999999999997,"text":"Water UK, which represents the industry, said: “Ofwat’s final determinations have been overturned by the CMA is further evidence, if any were needed, that the regulatory system has failed.”"}],[{"start":242.72999999999996,"text":"The findings come as the government moves towards creating a new single regulator that brings together the functions of Ofwat, the Environment Agency, the Drinking Water Inspectorate and Natural England. "}],[{"start":256.52,"text":"The CMA has proposed that the hearing of the regulatory appeals on water be transferred from the authority to an “appropriately resourced judicial body”."}],[{"start":267.04999999999995,"text":"The government is expected to release a paper outlining the transition plan — including a chair of the transitional authority — for the new regulator after the local government elections in May. "}],[{"start":279.68999999999994,"text":"Chris Walters, Ofwat’s interim chief executive, said: “We will reflect on the CMA’s decisions and their thorough examination of our final determinations, and they will be part of our considerations for the next price review.”"}],[{"start":305.10999999999996,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1776080717_2764.mp3"}