Water Bills Soaring: United Utilities Doubles Profits While Customers Prepare for Steep Increases
Northwest Region Water Bills to Rise, Netting Double Profits for United Utilities Company
United Utilities, serving 7 million households in the North West of England, has reported a massive leap in profits. Last year, the water company's underlying profits surged by 48.8% to an impressive £338.3 million, marking a significant increase from £227.3 million in the previous year [1].
These impressive numbers come as households prepare for a substantial hike in their water bills. Following the approval of funding measures by the regulatory body Ofwat, water suppliers across the country—including United Utilities—have raised their prices, with households facing a minimum increase of 20% over the next five years [2].
As of last month, United Utilities customers can expect their water bills to climb by an average of 32% over the next five years, according to the company's business plan approved by Ofwat. This product of investment in infrastructure is expected to result in an average increase of £94 in household bills from 2024-25 to 2029-30, prior to inflation [2].
The company's revenue grew substantially last year by £196 million, with £186 million attributed to regulatory adjustments like the 4.2% inflation-linked increase to the revenue cap [1]. United Utilities managed to increase earnings while simultaneously reducing the number of spills by 20,000 and achieving its lowest ever leakage rates in the North West [1].
Despite these improvements, the company has faced intense criticism for its environmental record. A BBC investigation alleged the firm dumped over 140 million litres of waste into Lake Windermere between 2021 and 2023 when it was not allowed [3]. This claim was followed by an Observer analysis that revealed seven United Utilities sewage plants and pumping stations across the Lake District pumped illegal spills on 501 days from 2018 to 2023 [3].
Undeterred, United Utilities plans to invest £13 billion in upgrading its water network by March 2030, a task to be funded by a 32% increase in customer bills [4]. By the end of the period, it aims to have upgraded more than 900 kilometres of water mains and slashed spills from storm overflows by over 60% [4].
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Amidst criticism over its environmental record and the rise in water bills, the company remains committed to its investments and the improvement of services. Despite the controversy, United Utilities has continued to pay dividends to its shareholders, including £344.1 million in the last year [2].
Louise Beardmore, the company's CEO, highlighted the success of United Utilities in a statement, "Our focus on performance has seen us meet or surpass around 80 percent of our performance targets over the last five years, the best performance of any water company" [1].
Sources:[1] United Utilities reveals profits doubled last year as households prepare for large increases in water bills over next five years.[2] Ofwat signs off steep price hikes for water bills: Everything you need to know.[3] Thousands of households face 'disgusting' sewage spills as regulator Ofwat takes no action against water firms.[4] Water companies in England and Wales face price rises of up to 10% a year to fund repairs and replace aging infrastructure, regulator to warn.
- United Utilities, in the face of criticism for its environmental record, is planning to invest £13 billion in improving its water network, aiming to slash spills from storm overflows by over 60% by 2030.
- The CEO of United Utilities, Louise Beardmore, highlights the company's success, stating that it has met or surpassed around 80% of its performance targets over the last five years, the best performance of any water company.
- Despite the rise in water bills and controversy over its environmental record, United Utilities continues to pay dividends to its shareholders, with £344.1 million paid out in the last year alone.
- In the realm of environmental science and finance, this significant investment by United Utilities in its infrastructure may have far-reaching implications for the energy efficiency and sustainability of the water industry, contributing to the broader aim of combating climate-change.
