Draft Determination for United Utilities Water PLC

United Utilities Group PLC

23 July 2009

                      OFWAT PUBLISHES DRAFT DETERMINATION                      

                        FOR UNITED UTILITIES WATER PLC                         

As part of the 2009 water price review process, Ofwat has today published its
draft determination for United Utilities Water PLC (UUW) covering the period 1
April 2010 to 31 March 2015. UUW is reviewing this as part of its ongoing
discussions with Ofwat ahead of publication of the final determination, which
is scheduled for November 2009. A brief summary of Ofwat's key proposals is set
out below.

Capital investment

A total capital investment programme included in the draft price limits of £3.4
billion (in 2007/08 prices), including infrastructure renewals expenditure of £
0.6 billion. This comprises £1.2 billion in relation to the water service and £
2.2 billion in respect of the wastewater service. Of this £3.4 billion capital
programme, investment to meet tighter regulatory quality standards, enhance
service to customers and maintain the supply/demand balance is £1.6 billion.
The remainder of the investment relates to maintenance of UUW's substantial
water and wastewater assets and infrastructure.

The capital expenditure incentive scheme (CIS) ratios are 107 for the water
service and 111 for the wastewater service.

Efficiency

An underlying operating efficiency improvement of 1.8% per annum in respect of
the water service and 2.4% per annum in relation to the wastewater service.

Return on capital

An average real, fully post-tax return of 4.5%.

Customer prices

An average annual real price decrease of 0.6% across the customer base over the
five-year period, with the following profile.

               2010/11      2011/12      2012/13      2013/14      2014/15   
                                                                             
  K factor       -6.3         +0.3         +0.6         +0.7         +1.8    

This draft determination is available on Ofwat's website at www.ofwat.gov.uk.

United Utilities' contacts

For further information please contact:

Philip Green, Chief Executive                          [phone]   
                                                                             
Tim Weller, Chief Financial Officer                    [phone]   
                                                                             
Gaynor Kenyon, Communications Director                 [phone]   
                                                                             
Darren Jameson, Head of Investor Relations             [phone]   
                                                                             
Rob Hughes, Investor Relations Manager                 [phone]   
                                                                             
James Bradley / Tom Murray, Tulchan Communications     [phone]