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OFWAT SEEKS CUSTOMERS VIEWS ON APPROVAL OF CHARGES SCHEMES

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Ofwat have issued a consultation document approval of companies' charges schemes 2001 - 02. ...
Ofwat have issued a consultation document approval of companies' charges schemes 2001 - 02.

The document seeks views on a number of charging matters that the director general of water services (the director), Sir Ian Byatt, will need to take into account when considering the companies' charges schemes for next year.

The charges schemes set out the level of charges, when they are applied, who should pay them and what methods of payment are available.

Director general of water services Sir Ian Byatt said: 'I aim to ensure that customers' views are taken into account when considering the approval of companies' charges schemes in 2001-02.

'This consultation offers customers the opportunity to set out their views to me on the important issues that affect bills for different groups of customers.'

Four issues have been identified for consultation as follows:

- Balancing measured and unmeasured tariffs (the tariff differential) The tariff differential is the mechanism Ofwat uses to ensure fairness in the balance between measured and unmeasured household customers' charges.

- The tariff differential is set to reflect the estimated additional costs that measured customers impose on water and sewerage companies and which should be met by measured customers, rather than customers generally.

Ofwat proposes that the maximum allowed tariff differential should be #30 for 2001-02. This is the same as the maximum allowed for this year.

- Low user tariffs

The director believes that standing charges should be kept as low as possible. He is seeking views on the secretary of state's guidance to him that all companies should provide an option of a low user tariff for metered customers in 2001-02, and on the structure of such a tariff.

- Social tariffs for vulnerable customers

The secretary of state's guidance says that water charging should take account of customers' ability to pay and of the needs of those on low incomes.

Ofwat has already recognised the problems faced by low-income customers by ensuring that the timing and payment methods available reflect the budgeting needs of customers.

The paper reviews the existing provisions for low income customers and looks at how, in the context of the guidance to him on this issue, the director might assess any further proposals for such tariffs by companies.

- Reduced charges for customers with unadopted sewers

The secretary of state's guidance to the Director also states that generally, customers with unadopted sewers, which are the responsibility of the customer, not the water company, should receive lower bills. The consultation paper seeks views on the issues that need to be considered in implementing this advice.

Notes

1. The approval of companies' charges schemes for 2001-02 consultation paper is available from the Ofwat library on 0121 625 1373. The document is also available on Ofwat's website at http://www.open.gov.uk/ofwat/

2. The director has power to approve companies' charges schemes under The Water Industry Act 1999. In approving charges schemes, he is required to ensure they comply with regulations issued by the secretary of state for the environment, transport and the regions.

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