Dŵr Cymru Welsh Water has announced a record £47 million customer dividend which will see customer benefit from a range of projects, including a lead pipe replacement programme, support for lowest-earning customers and reservoir visitor centres.

The dividend – made possible by its not-for-shareholder ownership model – was announced alongside the company’s annual financial and performance results, and confirmation of its highest-ever annual capital investment at £452 million – more than £1.2 million a day.

This includes a £31 million investment in a new treatment works at Bryn Cowlyd, Dolgarrog, to ensure nearly 100,000 customers in Llandudno, Colwyn Bay, Conwy and surrounding areas continue to receive a top quality drinking water supply, in the face of a changing climate.

The announcement of the record customer dividend follows confirmation that Welsh Water has reduced its carbon emissions by 79% since 2010-2011, resulting from investment in renewable energy generation and energy-efficiency technologies at its sites, as well as buying from certified renewable sources all the electricity that is not generated by its own assets.

Welsh Water said the customer dividend will be reinvested in projects to benefit customers and is money that would go to shareholders in other private companies. The utility is the only “not-for-shareholder” utility company in England and Wales, with three million customers across most of Wales, Herefordshire, and parts of Deeside and Cheshire.

Welsh Water has returned around £400 million of value to its customers in this way since 2001, when Glas Cymru acquired the business.

Independent research has also shown that Welsh Water’s household customers had the highest levels of trust in their water company and satisfaction with services of any water company in England and Wales.

The Consumer Council for Water (CCWater) also published a separate survey in April which showed Welsh business customers were significantly more satisfied with their water and wastewater services than their English counterparts.

Welsh Water Chief Executive - "Because we have no shareholders, we can reinvest profits into our business"

Welsh Water Chief Executive Chris Jones commented:

“As a not-for-profit water company, we have a commitment to act in the best interests of our customers. Because we have no shareholders, we can reinvest profits into our business, in the likes of our lead pipe replacement scheme, in the resilience of our water network, and in ensuring our sewer network is able to meet the challenges of long-term climate change.

This year’s customer dividend of £47 million (2018: £40 million) will include projects such as:

• £12 million towards helping lowest-earning customers pay their bills
• £10 million investment towards improving the reliability of the water network in areas that see repeated problems – with 205 kilometres of water mains replaced already, and 372 kilometres cleansed across our operating area as part of a £100 million investment programme
• £6 million investment to help prevent sewer blockages and flooding of homes and businesses
• £5 million to increase wastewater capacity around the River Dee near Chester to reduce the risk of sewage leaks
• £5 million to improve business efficiency and reduce costs to keep down customer bills, including deploying new digital technology and reducing vehicle fleet costs
• £4 million investment in water treatment works to reduce the risk of interruptions to water supply
• £2.5 million to replace customers’ lead supply pipes
• £2.3 million to improve recreation facilities and public access at Llanishen and Lisvane reservoirs in Cardiff, as part of a cross-Wales programme of visitor centre investments

The extra customer investment was announced as the company reports strong financial results and overall operational performance – despite a very challenging year of extreme weather, with a prolonged drought period during the summer of 2018, and the effect of Storm Callum in the autumn. Despite the severe challenges, the company met its target for reducing leakage for the year.

The company reported capital investment totalling £452 million for 2018-19 (2017-18: £430 million) – and is on target to invest nearly £2 billion in the five years to 2020.

Glas Cymru Chairman Alastair Lyons said:

“Our results show that Welsh Water is balancing the need to keep bills affordable for our customers, with the need to invest in our services to ensure our business is sustainable for decades to come. This is made possible by our unique non-shareholder model which allows us to invest in priority areas which our customers help us identify. “

“The record dividend investment and strong financial results make it possible for us to work to achieve the long-term objectives set out in our Welsh Water 2050 strategy. The strategic responses we set out in that document will stand us in good stead to tackle the big challenges facing the water industry over the next decades, such as climate change, population growth and rising customer expectations.”