An inquiry launched in January found the merger could result in a “small degradation” of service standards for Cambridge Water customers, and the loss of that company’s “distinctive approach” as a benchmark.
However, it said the merged company could be able to set higher standards than before in other areas and the overall impact would be small.
CC deputy chairman Simon Polito said: “On balance, we do not believe the merger will significantly hinder Ofwat’s task of assessing water companies’ performance and setting price controls.”
The commission is inviting views on its provisional findings and is due to reach a final decision by 20 June.
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