Welsh Water originated from the privatisation in 1989 of water supply and waste water arms of the Welsh Water Authority which itself had its origins in the Welsh National Water Development Authority that was created by the 1973 restructuring of the water industry in England and Wales. Welsh Water Authority was privatised by stock market flotation in 1989, along with the other nine regional water authorities, which provided the company with a substantial cash surplus for some years, which it used to diversify in a wide range of sectors including leisure. It renamed itself Hyder in 1996 after taking over a local electricity company and becoming a water and electricity multi-utility. However, in 1999/2000, following the Windfall Tax on utility profits and the 1999 Ofwat price review, Hyder got into financial difficulties which led to its breakup following a takeover battle. Western Power Distribution purchased Hyder on 15 September 2000 with a view to acquiring its electricity distribution business, and rapidly sold off Hyder's other assets. Dŵr Cymru Welsh Water was sold for £1 by WPD to Glas Cymru, a company set up to own DCWW for the public benefit, along with £1.85 billion of Hyder debt . Under the terms of its licence Glas Cymru, a company limited by guarantee, may not operate in sectors other than water.
Not-for-profit status
In 2001 Welsh Water became a not-for-profit organisation with no shareholders. This differentiates it from all the other Water companies operating in England and restores it to the same organisational status as water supply utilities in Scotland and the pre-privatisation water supply undertakings in England.
Coverage
In general it provides services and operates across Wales from the catchments of the River Dee, River Clwyd in the north, round to the River Usk and River Wye in the south and everything to the west of these catchments. This means that it includes part of the Wirral and Cheshire, and also parts of Gloucestershire, and Herefordshire, particularly Hereford. It excludes the area of Wales drained by the River Severn, which is instead served by Severn Trent. It also excludes those areas that were supplied by private water utilities such as Dee Valley Water which operated in the River Dee catchment supplying the Chester and Wrexham areas with water but is now a subsidiary of Severn Trent.
