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Pennon Group PLC (PNN)

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Thursday 25 November, 1999

Pennon Group PLC

South West Water's Response to OFWAT

Pennon Group PLC
25 November 1999


We note OFWAT'S announcement today of the Final Determination of price limits
for South West Water Limited, the water and sewerage subsidiary of Pennon
Group Plc.

It provides for a one-off price cut in water and sewerage charges of 12.2%, or
an average of £48 per household in the first year (2000/01), followed by
average increases above inflation (the K factor) of 0, 2,2, and 2% for the
following four years - a decrease in the average household bill over the five
years of £36 or 10%.  It also provides for a total capital expenditure of £725
million between 2000 and 2005 to enable the major programme of improvements to
water and sewerage services in the region to continue.

The Final Determination represents a major challenge to the Company. We are
continuing to work on proposals designed to meet that challenge and intend to
comment further when the Interim Results for 1999/00 are announced on 9
December 1999.

For further information, please contact:

K L Hill      - 01392-443220
J W Rayner    - 01392-443401
Andrew Dowler - Financial Dynamics - 0207-831-3113