Regulator says price rises needed to fund net zero future in Scotland

Average annual water charges in Scotland should increase by between 1% and 2% above the rate of Consumer Price Inflation in the 2021-7 period, if Scottish Water is to achieve net zero emissions by 2040 and provide resilient services into the future, regulator the Water Industry Commission for Scotland (WICS) has said.

In a paper published last week – Prospects for prices, its final decision paper head of draft determinations being published in May 2020 – WICS set out the range and reaffirmed it planned to endorse any specific settlement within that price range negotiated between Scottish Water and consumer representative in the price review, the Customer Forum.

It said: “The Commission considers that increases in the top half of that range are most consistent with the long-term challenges that Scottish Water has to meet,” but that influencing factors including the level of annual investment that should be targeted (WICS proposed £1bn-£11bn) and what level of efficiency the water company should pursue (WICS’ range was 0.75-1.5%) would be for the Forum and company to agree.

The Strategic Review of Charges 2021-27 is being conducted in a very different way to previous price reviews, under the principles of Ethical Business Regulation and Practice. WICS emphasised the need for Scottish Water to transform its business in a big way, to make the most of the new opportunities on the table.

• For full details, see March’s edition of The Water Report