Page last updated at 10:59 GMT, Monday, 23 November 2009

Northumbrian Water hit by bad debts

Water running from kitchen tap
Water companies are waiting for regulators ruling on prices on Thursday

Business closures in the north-east of England left Northumbrian Water with bad debts of £1.7m in the six months to September, the firm has said.

The debt was mainly caused by the closure of a large customer on Teesside.

The firm also said the current economic downturn was hitting revenues from industrial and commercial customers.

However, higher prices helped to offset difficult trading conditions and its pre-tax profit rose 12.8% to £87m.

On Thursday, water regulator Ofwat is expected to rule on how much water companies can increase their prices over the next five years.

Northumbrian says the outcome is the "key risk for its business", and is challenging a draft report published in July.

Ofwat limited Northumbrian to increasing its prices by no more than £3 or a 1% increase in prices before inflation for the whole five-year period.

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