SEVERN TRENT PLC - Ofwat publishes Final Determination

Ofwat publishes Final Determination

Severn Trent Water confirms that it has received Ofwat's Final Determination
for the period 2010 to 2015 ("AMP5").

Tony Wray, Chief Executive, said: "The Final Determination is a complex
document with a huge volume of data and information to analyse and consider. We
will take the time necessary to fully analyse the document before responding to
our stakeholders."

The Final Determination contains Ofwat's decisions on the Final Business Plans
submitted by all water companies in April 2009, and follows consultation on the
Draft Determinations which Ofwat published in July 2009.

The Ofwat Final Determination includes the following for Severn Trent Water:

  * An AMP5 capital investment programme of GBP2.45 billion (net of efficiencies,
    grants and contributions at 2007/08 prices) compared to GBP2.2 billion in the
    Draft Determination;

  * A cost of capital of 4.5% real, post tax. The component parts of the
    assumed cost of capital are; real post tax cost of equity of 7.1%, real
    post tax cost of debt of 2.6% and 57.5% gearing. This is unchanged from the
    Draft Determination;

  * A fall in average household bills of 4% in real terms (annual average fall
    of 0.9%) by 2015, compared to a fall of 8% (annual average of 1.5%) in the
    Draft Determination;

  * Annual average operating expenditure of GBP497 million compared to GBP469
    million in the Draft Determination.

The Final Determination document can be found on Ofwat's website
www.ofwat.gov.uk

Enquiries:

John Crosse                Andrew Marsh              Mal Patel / Peter Hewer

Head of Investor Relations Public Affairs Manager    Tulchan Communications

Severn Trent Plc           Severn Trent Plc          0207 353 4200

0121 722 4523              0121 722 4555



END

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