Efficiencies from PR19 would “more than offset” the impact on South West Water (SWW) customer bills from a proposed switch of responsibilities for the Isles of Scilly’s water infrastructure to the West Country water firm.
Following consultation in February 2019, Ofwat has taken a “minded to” decision to transfer responsibility for the Isles of Scilly’s water and wastewater infrastructure to SWW in a bid to meet the “substantial investment” required to bring the islands’ water operations in line with mainland England.
The cost of upgrading the Isles’ infrastructure would, according to Ofwat, add about 2% to SWW’s anticipated costs over 2020-25. Those costs would be recovered from the entire SWW customer base including the acquired customers in the Isles of Scilly. Bills for SWW’s existing customers would, according to Ofwat, increase £2.10 a year between 2020 and 2025, and £4.20 a year between 2025 and 2030.
The SWW bill increase would be “more than offset by the effects of increased efficiency and other changes also agreed as part of PR19,” said Ofwat. Isles of Scilly customers would see large increases in bills phased over three years and that vary between the five islands. Indicative increases for unmetered house dwellers on a council tariff in St Mary’s would double prices to £1394 a year after three years.
Introducing the switch to SWW requires the Water Industry Act 1991 to be extended to include the Isles of Scilly.