U.K. water and sewerage regulator Ofwat announced last week its preliminary price determination regarding how much a British water company is allowed to charge over a five-year review period that begins April 2005. Although Ofwat cut back the business plans for all water companies in the country, the preliminary draft determinations will have no immediate impact on the ratings of these companies, analysts at Standard & Poor's said.

The impact of the latest tariff review is considered one of the most important since the industry was privatized in 1989, according to S&P and its outcome determines whether the creditworthiness of U.K. water companies will continue to deteriorate or remain at current levels.

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