Water providers have come under increased pressure from the industry
watchdog to ensure drought-stricken areas are helped by regions with
more plentiful supplies.
The impact of recent weather - flooding
in a time of drought - is one of the major long-term issues water
suppliers have to tackle, Ofwat warned, as it unveiled guidelines for
how it intends to set tariff limits between 2015 and 2020.
The
regulator warned the water industry will need to find creative ways of
working to meet challenges posed by a bigger population and climate
change. As well as giving customers a stronger voice on how water
companies deliver services, Ofwat will "send clear signals" to companies
on what is required of them, such as trading water during times of
drought and heavy rainfall.
Ofwat chief executive Regina Finn
said: "These principles will ensure that customers are at the heart of
decisions. They need to know that bills are fair and legitimate."
A more detailed consultation on the methodology to be used for the next price review will be published in the autumn.
April
was declared the wettest for the month since records began in 1912, but
the preceding dry winter meant water companies and the Environment
Agency refrained from lifting drought status from several areas for
about two weeks.
Ofwat flagged the impact of recent weather as it
unveiled its new principles, which also included giving companies "more
opportunity to innovate", for example by finding lower cost, lower
environmental impact and lower carbon solutions.
The watchdog said
it would ensure that regulation is focused and targeted on where it is
most needed to protect customers and adapt and support the sector as it
learns how to tackle new challenges over time.
Ms Finn said £98
billion has been invested since privatisation, service for customers has
improved significantly, drinking water quality is among the best in
Europe and average bills are £120 lower than they would have been
without regulation.
She added: "But now we need to become smarter
in how we value, manage and use water. This means the industry must
focus on customers and show them how they are meeting their priorities."
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