Major water firm planning to hike bills by up to 59% next year – adding £228 annually to household costs
THAMES Water is trying to hike customer bills by as much as 59 per cent, more than double what the regulator has deemed acceptable.
The troubled company wants to raise water bills by an average £18.99 a month – or £228 a year – to fund overdue investment in its leaky pipes and sewage systems.
Thames Water has lodged paperwork with Ofwat with a request to increase bills from £433 by 52 per cent to £666.50 by 2030.
However, if it spends more on a new reservoir it could increase it by 59 per cent to £696 within the next six years.
Sir Adrian Montague, chairman of Thames Water, told cash-strapped households: “After decades of focusing on keeping bills low, now is the time for difficult choices”.
Its earlier attempt to raise bills by 40 per cent was rejected by the regulator and Ofwat has said it should be limited to 23 per cent.
The troubled water firm yesterday argued that Ofwat’s cap were “not tenable” and made the business “uninvestable”.
It added there was a “multi-billion pound gap” between what it was allowed to charge customers and the investment needed.
It has accused the regulator of using “dangerous soundbites”.
The industry’s trade body, Water UK, yesterday claimed that Ofwat’s decision to limit customer bill hikes would mean “more housing will be blocked, the recovery of rivers will be slower and we will fail to deal with the water shortages we know are coming.”
Thames Water’s filings also reveal that it needs to raise £3.3 billion of new finance and “substantial new debt” for its investment plans.
The firm’s debt has been downgraded to “junk” by credit ratings firms which make it more expensive to raise money too.
It said yesterday that it risks “tipping into a downward spiral, from which recovery will be challenging” if Ofwat continues to be too onerous.
Thames Water has already been put into unprecedented special measures by Ofwat after warning it will run out of cash by next May unless it can raise fresh funds.
It argues that investors don’t want to put more money into the business unless they can generate returns from a business plan that includes higher customer bills.
Water UK boss David Henderson wrote: “Ofwat’s approach would make it impossible for the water sector to attract the level of investment that it needs and will reduce the UK’s attractiveness to international investment.”
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.
An Ofwat spokesperson said: “We have received responses from many organisations, including water companies, customers, environmental and consumer organisations, and investors.
“Inevitably these reflect a diverse range of views on the proposals we have made.
“We will consider all of these responses carefully over the next three months and set out our final decisions on 19 December.”