Ofwat has signalled water customers could be at the start of “the decade of falling bills”.
The water regulator’s Chair Jonson Cox believes prices could fall in real terms until 2025 at least.
He said the upcoming price review is likely to set a new record for the “lowest ever regulated cost of capital for water”, which means returns for companies would be lower – so they need to achieve even more for their customers for even less so they can deliver returns for their shareholders.
This lower return base could see water bills continuing to fall from 2020 to 2025.
Mr Cox added: “This price review will remind companies who is their boss: customers. If their plans are not based on customer participation and engagement , they will get what they deserve from Ofwat.”
He also said the management of water firms need to “step up” and improve service and reduce bills for customers.
He believes while the sector has improved its delivery for customers “massively” over the last few decades, the behaviour of a “handful of water companies” has cast doubt over every other company.