Thames Water, facing a crisis, is pushing to increase customer charges beyond the limits set by the industry regulator over the next five years, citing unfair treatment. The largest household supplier in Britain is struggling with a £19bn debt and had proposed a 53% bill increase from 2025-30. However, Ofwat, the industry regulator, rejected this demand in December and instead approved a 35% rise as part of a price determination for all suppliers in England and Wales.
The substantial increases in bills for many firms aim to enable significant investment in infrastructure, particularly in sewage systems, to address concerns about pollution. Thames Water is under significant financial strain and is striving to maximize revenue due to its precarious financial position.
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Thames Water, along with other suppliers, had until this week to appeal to the Competition and Markets Authority (CMA). Customer bills are expected to rise in April in line with Ofwat’s restrictions until the appeals process is finalized, which could take several months. As a result, the average annual bill for the company’s 16 million households is projected to reach £639.
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Thames Water stated, «The Board of the UK’s largest water and wastewater services company unanimously decided to challenge the Final Determination for the regulatory period 2025 to 2030, asserting that it does not adequately support the necessary investment and improvement required for Thames Water to serve its customers, communities, and the environment over the next five years.» The company criticized Ofwat for not fully considering the challenges within its operational area, including London, and for failing to strike the right balance between risk and return.
While in discussions for new investments, Thames Water is awaiting approval from the High Court for a £3bn rescue deal to avoid potential collapse. The company had previously warned that it could run out of cash by the end of March.
Chairman, Sir Adrian Montague, commented, «We have chosen to appeal our Final Determination to the Competition and Markets Authority in the best interests of our customers and the environment. Our focus is on stabilizing the business for the long term to successfully navigate our turnaround, and establish and maintain an infrastructure that supports growth and resilience against the impacts of climate change.»