Accounting error leads to customer overcharging


Ofwat 2Birmingham, UK — (METERING.COM) — September 7, 2006 – UK water supplier Tendring Hundred Water, with 70,000 customers in north-east Essex, has found an error in its income data following regulator 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 2005-2010. The error meant that price limits were set higher than necessary, with the result that customers were paying more than was necessary.

Ofwat has obtained an assurance from the utility that it will revise its future prices to ensure that it does not benefit from the overpayments. In addition the amount overcharged, plus interest, will be returned to customers through a reduction in planned water bills from April 2007. 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.