Household Bills
Ofwat blocks Thames Water 8% price hike
Ofwat has blocked the UK’s biggest water supplier, Thames Water, from imposing a price hike of 8% on its customers for 2014-15.
The water regulator said the requested price hike of £29 was not justified, despite Thames Water arguing that the extra money was needed to meet the growing cost of bad debts, repairs to more of the sewer network during a five-year period.
The price hike would also have helped fund the £4.1bn ‘Thames Super Sewer’ that is designed to prevent regular overflows of untreated sewage into the capital’s river.
Ofwat had provisionally turned down the request last month, arguing that the company was not doing enough to control costs or chase delinquent customers.
Ofwat’s chief regulation officer Sonia Brown said: “We said we would challenge Thames’ application, in the interests of customers. We did just that and on the evidence provided we are not convinced that an extra bill increase is justified.”
This is Ofwat’s final decision on this application; however Thames Water now has the right to appeal to the Competition Commission.
Ofwat’s decision means the maximum that Thames can add to customers’ bills for 2014-15 is still 1.4% above inflation, as set in the 2009 price review.
Last week Ofwat’s chairman Jonson Cox wrote to all water companies asking them to consider whether they needed to increase their bills for 2014-15 by the full amounts set in the last price review given the ‘hard time their customers are facing’.