Water regulator to block Thames Waters intended bill increases
In August, Thames’ submitted the application to request permission to raise prices which would add around £29 to the average household bill of £354.
Britain’s biggest water company says it needs the extra money to combat bad debt caused by some customers not paying bills and increases in Environment Agency charges, among other factors.
However, Ofwat hit back at the request, criticising the water giant of underspending on sewer flooding, a slippage in part of its investment programme for sewer treatment and not adequately maintaining parts of its wastewater network.
Chief regulation officer for Ofwat, Sonia Brown, said: “We said we would challenge Thames Water’s request. We have looked at the details and do not believe the current evidence justifies an increase in bills.””
A spokesman for Thames Water said: “We will review Ofwat's draft proposals, and submit our response in due course.”
Ofwat will make its final decision on the application next month following a consultation period.
Thames Water is the only water company to have requested an increase within the current five-year pricing period and its is only the 13th time since privatisation in 1989 that a water company has made that request before the next price review.
The request came less than two weeks after the utility firm announced that bills could rise to 1.4 per cent above the rate of retail price index inflation from 2015 to 2020.
Thames Water’s end of year accounts, released in June, revealed they paid no corporation tax on pre-tax profits of £144.9m, while raising bills by 6.7 per cent.
The same report showed that £92m was handed out to shareholders in the form of dividends, while their chief executive received an increase in salary and a £274,000 bonus.
Any changes to bills would come into effect from April 2014.
