WATER company Severn Trent has agreed to lower its bills after accepting the price determination for 2015 to 2020 delivered by utilities regulator Ofwat in December.
The average bill will fall by £4 in the next year, and by around £60 over the next five years.
The firm described the price review carried out by Ofwat as a “challenging process”, and said the final determination “contains stretching objectives and requires significant improvements in operating efficiencies”.
In order to comply with Ofwat’s capital requirements the firm will commence a £100m share buy-back programme. It has also reduced the dividend for 2015-16 by five per cent compared with the current year dividend, and the policy in future will be to grow the dividend annually at no less than the retail prices index level until March 2020.
Liv Garfield, chief executive at Severn Trent, said: “We believe our plan for the next five years achieves that balance, delivering better services, better value and a healthier environment. We were pleased that our business plan achieved a high approval rating of 88 per cent from customers.”
Shares in Severn Trent closed up 0.88 per cent yesterday.