Thames Water, the UK's largest water company, is attempting to convince Ofwat to approve a potential increase of up to 44% in consumer bills over the next five years by increasing investment aimed at enhancing environmental standards, reports The BBC.
The water giant, grappling with substantial debts, seeks to inject a minimum of £1.1 billion more into environmental initiatives, emphasizing a commitment to address longstanding concerns over leaks and sewage overflow.
However, the initial proposal tabled by Thames Water was met with scepticism by regulatory body Ofwat, leading to questions about the company’s possible nationalization.
Thames had originally proposed investing £18.7bn between 2025 and 2030 and increasing customer bills by 40%, on top of inflation, over the five-year period.
The dismissal of its initial plan by the Regulator led investors backing Thames Water to retract £500 million in emergency funding.
Thames Water released a statement on Monday announcing a proposal to spend an extra £1.9bn on top of its original plans, which could see bills climb by 44% to £627.
“TWUL announces that it has now submitted an update to its PR24 business plan showing a £1.1 billion increase in AMP8 total expenditure to £19.8 billion which will be directed to projects benefiting the environment.”
“TWUL will continue to look for opportunities to deliver more investment in AMP8 and has proposed that a further £1.9 billion of potential investment is placed into a “Deliverability Assessment Mechanism”. This means if TWUL was to invest the full £1.9 billion in AMP8, then annual average customer bills would increase further by £19 over that period.”
Thames Water's push for increased investment echoes broader industry trends, with other major players like Southern Water and Severn Trent also proposing substantial price escalations.
Southern Water proposed a 66% price rise on top of inflation, while Severn Trent put forward a 37% increase.
Ofwat's impending decision, slated for a crucial meeting in May, will shape the landscape of water tariffs, with a draft determination expected in June.
Chris Weston, CEO of Thames Water, said: “Our business plan focuses on our customers’ priorities. As part of the usual ongoing discussions relating to PR24, we’ve now updated it to deliver more projects that will benefit the environment. We will continue to discuss this with our regulators and stakeholders.”
