Wednesday 08:26
United Utilities Water has today given Ofwat a legally binding undertaking to make changes to arrangements it has for trading with associate companies to ensure those arrangements comply with its licence.
Under United Utilities Water's licence the company must trade at 'arm's length' with its associates. All changes will be completed by 30 April 2007.
Keith Mason, Ofwat's Director of Regulatory Finance and Competition, said: "We have been concerned for a number of years about whether some of United Utilities Water's transactions comply with its licence. We are satisfied that this legal undertaking will ensure that all its arrangements are compliant by the deadline.
"We adjusted price limits in 1999 and 2004 to protect customers. And in our 2005-06 financial performance report we said we expected the company to address our concerns.
"This is an issue Ofwat takes very seriously and we will be considering carefully what further measures may be appropriate in this case."
The regulator will make an announcement early in 2007 about any further action it intends to take.
Notes to Editors:
1. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will allow companies to carry out their functions properly, and finance them. Its duties include protecting the interests of consumers, wherever appropriate by promoting effective competition.
2. The legal undertaking covers trading arrangements between United Utilities Water and five associates: United Utilities Networks; Vertex Data Science; United Utilities Property Solutions; United Utilities Facilities Management and THUS plc.
3. The company's undertaking has been published on our website http://www.ofwat.gov.uk and copies are available from our library by calling 0121 625 1373.
Centre City Tower 7 Hill Street Birmingham B5 4UA
Client ref PN 38/06
