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Water bills in England and Wales are expected to drop by an average of £ 50 between 2020 and 2025, in line with plans published by the sector regulator.
Ofwat added that companies should also invest an additional £ 6m each day in improving customer services.
This comes from a general discontent with the performance of many water companies.
Ofwat said these measures would mean "better services, a healthier natural environment and lower bills".
"[Water companies] Rachel Fletcher, head of Ofwat, told the BBC that the "Today" program will be responsible for the non-compliance of its performance, but also for severe criminal penalties.
- Most water companies fail to meet the challenges
- Thames Water fined £ 120 million for leaks
Ofwat said the bill reductions would vary considerably – from £ 7 in Hafren Dyfrdwy to £ 110 in Northumbrian Water compared to the 2017-18 prices.
It comes after only three of the 17 water companies in England and Wales have adopted the latest report from Ofwat in January.
All companies have proposed reducing their bills over the 2020-2025 period, while reducing leaks and helping vulnerable customers. But only Severn Trent, United Utilities and South West Water's plans have been approved.
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Ofwat wants water companies to spend more on fighting leaks
Leaks have also caused persistent problems, especially after extreme weather events such as last year's freezing Beast from the East.
Although leakage in England and Wales is much smaller than in the mid-1990s, progress in combating leakage has slowed at a breakneck pace since 2001.
Companies will now have to invest more in the fight against leaks between 2020 and 2025, saving a quantity of water equivalent to the needs of the people of Manchester, Leeds, Leicester and Cardiff.
They will also need:
- Reduce supply interruptions by almost two-thirds,
- Reduce pollution incidents
- Reduce the number of customers with low water pressure
- Help around 1.5 million customers who have trouble paying.
Ofwat said it would be £ 12 billion of new investment, over and above usual costs, or £ 6 million a day over the period.
Water companies will be able to make statements on the proposals and the latest transactions will be confirmed in December.
Tony Smith, chief executive of the Consumers Council for Water, called the projects "good news", but added: "Not everyone will see its bills go down when we add inflation and it will will tell customers how much the financial benefits of Ofwat companies could touch them in the pocket.
"Only half of the three million households that are struggling to pay their water bills will receive financial badistance as part of these plans," he added.
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