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Thames Water is appealing to the Competition and Markets Authority for a review of the price increases it can charge customers between now and 2030, the first time the UK’s largest water utility has appealed since privatisation more than three decades ago.
Thames Water said on Friday that the price level stipulated by regulator Ofwat did not “appropriately support the investment and improvement that is required for Thames Water to deliver for its customers, communities and the environment for the next five years”.
Thames Water, which provides water and sewage services to about a quarter of the UK population, was granted a 35 per cent increase in bills by Ofwat, raising the average household bill by a third to £639 from April, including inflation. Thames Water had asked for 53 per cent.
Sir Adrian Montague, chair of Thames Water, said: “We have taken the decision to refer our final determination to the Competition and Markets Authority in the interests of our customers and the environment.
“We are focused on 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.”
The request for further bill increases comes at a perilous time for the company, which is grappling with debts of nearly £19bn. Thames Water is waiting to hear next week whether the courts will approve a £3bn creditor bailout to prevent it falling into the government’s special administration regime, a form of temporary renationalisation.
Last week, a High Court judge criticised Ofwat and the government for failing to engage in court proceedings held to decide on an emergency loan for the utility.
Most water companies are yet to declare whether they will support Ofwat’s decisions on pricing and spending and have just a few days before the deadline.
To date, only the three publicly quoted water companies — Severn Trent in the midlands and its associate Hafren Dyfrdwy, South West Water and its associate Sutton and East Surrey Water, and United Utilities in the north-west of England — have accepted Ofwat’s determination, in addition to Dŵr Cymru Welsh Water. Of the regional monopolies, this leaves the financially troubled Southern Water, plus Northumbrian, Yorkshire, Anglian and Wessex to declare their hand.
