United Utilities gives legally binding undertaking to change trading arrangements
Posted: Tuesday 2nd January 2007
United Utilities Water has 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 our2006-06 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.
