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Ofwat will ensure that customers of Tendring Hundred Water are reimbursed after the company admitted that an accounting error led to customers paying more than was necessary. Ofwat has already obtained an assurance from Tendring Hundred Water that the company will revise its future prices to ensure that it does not benefit from the overpayments. The amount overcharged will be returned, including accrued interest, to customers through a reduction in planned water bills from April 2007. Tendring Hundred Water estimates the error resulted in an overcharge of about £5 on a customer's average bill in both 2005-06 and 2006-07. Ofwat and the company will jointly appoint an independent firm of accountants to verify the size of the error and its effect on customers' bills. Tendring Hundred Water found an error in its income data following Ofwat's challenge to regulatory information reported to it in June. The error relates to the company's estimates of its income from metered customers. The error was also in the company's revenue projections used in its business plan. Ofwat used these revenue projections to help it set price limits for Tendring Hundred Water for 2005-10. The error meant that price limits were set that were higher than necessary, resulting in customers paying more than was necessary. Keith Mason, Ofwat's Director of Regulatory Finance and Competition, said: "Ofwat is taking this matter seriously. We will need to verify how the error occurred and how customers have been affected. "Customers' interests must be protected, and we have secured an assurance from Tendring Hundred Water that the company will not benefit from the error. Following independent verification of the facts, customers will be reimbursed in their bills next April. "The impact on the company is very significant. But there appears to be no evidence to date to suggest that this is anything other than an accounting error." 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. The Water Services Regulation Authority succeeded the Director General of Water Services on 1 April 2006. 2. Tendring Hundred Water, part of Veolia Environment, serves the needs of 70,000 homes and businesses in north-east Essex. 3. Average household water bill for Tendring Hundred customers in 2006-07 is £167. This excludes charges for sewerage services. MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1322/1442/1416/1496. Out of hours enquiries to 0121 625 1300. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk  | ||||||
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