Reports that regulator Ofwat will refuse water companies' requests for big customer bill hikes have hit shares in listed water companies.
United Utilities Group PLC (LSE:UU.), Severn Trent PLC and Pennon Group PLC (LSE:PNN, OTC:PEGRY), which owns South West Water and Bristol Water, were among the biggest fallers on Tuesday, down 3.7%, 2.5% and 2.2% respectively.
Water companies have applied to raise consumer bills between 30% and 90% as they look to invest in improvements to the network while also keeping up dividends for their shareholders.
Watchdog Ofwat is "poised" to turn down these pricing proposals, the Guardian has reported, with some water companies getting half of what they requested.
Ofwat's draft determination of the price review for the next five years had been due next month, 12 June, but a new date of 11 July was set after the general election was called.
Following this, the closing date for the consultation on draft determinations will be 14 August and the regulator will set final price controls in December 2024.
Severn Trent, which recently defended a £3.2 million salary for its CEO despite the Midlands water supplier being fined £2 million for spilling 240 million litres of raw sewage into the River Trent near Stoke, is seeking a 50% increase in customer prices.
Pennon, which was recently forced into apologising for an outbreak of diarrhoea in Brixham affecting at least 22 people, is seeking a 31% bill hike.
United Utilities, which recently increased its dividend by 9.4% despite reports that it failed to prevent millions of litres of raw sewage from pumping into Windermere in the Lake District, wants to increase bills by 38%.