Water company's own power plants will boost profits

Jun 4 2009 by Andrew Mernin, The Journal

NORTHUMBRIAN Water said its plans to invest more than £70m in renewable power plants in the region would help beat soaring energy costs which have severely dented its latest annual profits.

The Durham company yesterday blamed a 50% surge in annual energy costs and lower demand from recession-hit businesses for a 10% drop in annual profits.

The group – which operates in the North East and owns Essex & Suffolk Water – said pre-tax profits were £152.7m in the year to March 31. As well as energy overheads, it said inflation and bad debts had pushed operating costs up 6.8% to £380.1m while water use by industrial and commercial customers had fallen by about 4%.

But the group said its outlook for the future was strong and its plans to protect itself against the volatile energy market would see it generate 20% of its own power by 2013.

The company has invested £33m in its project at Bran Sands Teesport, which will generate green energy from sludge when it comes on stream later this year.