A WATER firm with two million customers has asked the regulator if it can charge customers more following a 35% bill rise.
Thames Water is asking Ofwat, the water services watchdog, to allow it to charge customers even more over the coming years than previously granted.
It comes after Ofwat revealed water bills would rise by an average of £31 per year over the next five years in England and Wales.
The increase was significantly higher than the expected average rise of around £20 a year per household, outlined in the regulator’s draft proposals in July.
Ofwat said the increase would pay for a £104billion upgrade of the water sector to deliver “substantial, lasting, improvements for customers and the environment”.
Thames Water is now allowed to hike consumer bills by 35%, as the regulator also handed it an £18.2million fine for paying “unjustified” dividends to shareholders.
These hikes were suggested by the regulator, Ofwat, in December.
Water companies can appeal the decision and suggest the figure be either higher or lower.
But now, Thames Water wants the Competition and Markets Authority to review Ofwat’s decision.
Chairman Adrian Montague said the move is “in the interests of our customers and the environment”.
He added the appeal is aimed at “putting the business on a long-term stable footing so we can succeed in our turnaround, and build and maintain an infrastructure that supports growth and can withstand the effects of climate change”.
He said Ofwat’s current allowance will “impact our ability” to fund the improvements needed to its vast network of pipes, sewers and drains, which are creaking from a severe lack of investment over recent decades.”
It comes as Thames Water is on the verge of collapse.
It has racked up a roughly £19billion debt pile, and only has enough cash to see it to March 24.
It is waiting for a court decision in the coming days which would allow it to take out another £3.3 billion loan from a selection of large hedge funds, asset managers and other lenders.
They include Abrdn, Apollo Global Management, Elliott Investment Management, Invesco and M&G.
The emergency loan has an unusually high interest rate of 9.75% over two-and-a-half years.
This is designed as a temporary measure to keep it operating while it finds a new source of permanent funding.
If Thames does not get the emergency loan it will likely fall into Government hands until officials can find a new owner.
BILL HIKES FOR MILLIONS OF CUSTOMERS
Other water companies have also said they would increase costs for customers.
Southern Water customers face the sharpest rise, with bills surging by a staggering £224 (47%), pushing the average yearly cost to £703.
Not far behind, Hafren Dyfrdwy bills will jump by 32%, from £447 a year to £590.
South West Water bills will also rise from £520 a year to £686.
That’s according to new analysis from industry body Water UK.
The increases are higher than those outlined by regulator Ofwat in its recent five-year price limits just before Christmas, as they now include inflation.
Water UK has justified the rise by citing an ambitious £104billion investment programme spanning the next seven years.
From April 2025 to March 2026 alone, water companies are set to spend a record £20billion.
COMPENSATION ALREADY DUE
It comes as water companies face criticism over record levels of sewage discharged into rivers and seas despite huge profits.
At the beginning of October, water companies were ordered to return £157.6million to customers after failing to meet pollution targets.
Each year, Ofwat evaluates the performance of England and Wales‘ 17 largest water and wastewater companies against key targets, including sewer flooding, supply interruptions, and water leaks.
For the second consecutive year, no company attained the highest rating, although four companies demonstrated improvement compared to the previous year.
As a result, millions of customers at 13 water companies will see their bills slashed next year as the watchdog issues fresh penalties.
The penalties for each water firm are as follows:
- Thames Water £56.8million
- Anglian Water: £38.1million
- Yorkshire Water: £36million
- Southern Water: £31.9million
- Welsh Water: £24.1million
- South West Water: £17.4million
- South East Water: £8million
- Wessex Water: £5.3million
- Affinity Water: £5.2million
- Bristol Water: £1.9million
- Portsmouth Water: £1.1million
- South Staffs Water: £700,000
- Hafren Dyfrdwy: £200,000
The regulator said that the amount returned to customers will be applied to bills from April 2025.
Water companies were set stretching targets for 2020-25 to deliver better outcomes, for both customers and the environment.
Where they fall short on these, the regulator imposes performance penalties resulting in customers being charged less than they would be the following billing year.
Performance penalties have totalled more than £430million since 2020.
Last year, Ofwat forced through bill reductions worth £177.6million.
On Thursday (December 19), Ofwat will confirm how much water companies are allowed to hike bills over the next five years.
What water bill support is available?
IT'S always worth checking if you qualify for a discount or extra support to help pay your water bill.
Over two million households who qualify to be on discounted social water tariffs aren’t claiming the savings provided, according to the Consumer Council for Water (CCW).
Only 1.3million households are currently issued with a social water tariff – up 19% from the previous year.
And the average household qualifying for the discounted water rates can slash their bills by £160 a year.
Every water company has a social tariff scheme which can help reduce your bills if you’re on a low income and the CCW is calling on customers to take advantage before bills rise in April.
Who’s eligible for help and the level of support offered varies depending on your water company.
Most suppliers also have a pot of money to dish out to thousands of customers who are under pressure from rising costs – and you don’t have to pay it back.
These grants can be worth hundreds of pounds offering a vital lifeline when faced with daunting water bills.
The exact amount you can get depends on where you live and your supplier, as well as your individual circumstances.
Many billpayers across the country could also get help paying off water debts through a little-known scheme and even get the balance written off.
Companies match the payments eligible customers make against the debt on their account to help clear it sooner.
If you’re on a water meter but find it hard to save water as you have a large family or water-dependent medical condition, you may be able to cap your bills through the WaterSure scheme.
Bills are capped at the average amount for your supplier, so the amount you could save will vary.
The Consumer Council for Water estimates that bills are reduced by £307 on average through the scheme.
