It’s not clear that customers are complaining about the size of their water bills; indeed some water company surveys have indicated that customers would be willing to pay more for improvements such as a reduction in leakage.
“It's cheaper for these companies to borrow, so bills should come down” said the regulator’s Chief Executive. For a company like Thames Water with a £12bn debt mountain to service, and the industry as a whole with debt of £50bn, the prospect of lower income and higher expenditure is unlikely to reduce borrowing costs.
There had been a reluctant acceptance of an aggressive leakage reduction target but not when coupled with a simultaneous reduction in income.
It seems almost inevitable that water companies will challenge the price determination. Dissatisfied companies have the option of appealing to the Competition and Markets Authority. Expect them to do that, and for uncertainty to delay investment in the meantime.
The new 5 year regulatory period starts 1st April 2020.