Most UK households will find that their waste water bills are higher than the actual water they use. How absurd is that?
Here is an example of how a UK Waste Water company is trying to justify their exorbitant charges.
Most surprisingly, we are led to believe that this particular Waste Water company is paying, on average, between 19% and 20% interest on it's DEBT. How so, since the UK has been in a low interest rate environment of around 2% to 3% for the last nine or ten years, with businesses borrowing rates being even lower. Logically a utility company would enjoy substantially lower borrowing costs than the current 2 % to 3%, due to the greatly reduced risk of default.
Where is the rest going?
To add insult to injury, consumers are being charged on average 4% for penalties imposed by Ofwat (the UK's water regulator) for poor customer satisfaction, cost savings and revenue collection. Penalties should come out of their profit margin, to ensure that they improve their business in these areas. If they don't improve they don't make any money - like every other business. BTW, I have yet to see a reward given by Ofwat, passed on to consumers.
Investing in these utility companies won't produce much of a return for the average share holder since they would have us believe their profit margin is only about 3.5%.
What planet do they think we live on?
Anyone have any workable solutions?