Thames Water makes bid to lift bills by up to 44%

Thames Water is attempting to persuade the regulator to let it raise consumer bills by up to 44% over the next five years by increasing investment.

The heavily indebted water firm aims to spend at least £1.1bn more on environmental measures.

Regulator Ofwat had dismissed the company’s original proposal, leading to questions over the firm’s future.

Thames’s huge debts have led to speculation it could be taken over by the government.

Thames is the UK’s largest water company, with 16 million customers in London and the Thames Valley region.

However, it currently has debts of about £14.7bn and it has also come under fierce criticism for water leaks and sewage spillages.

Thames had originally proposed investing £18.7bn between 2025 and 2030 and increasing customer bills by 40%, on top of inflation, over the five-year period.

Ofwat dismissed this plan, prompting shareholders at Thames’ parent company, Kemble Water, to withdraw a proposed cash injection and default on debt interest payments.

Thames has now proposed spending an extra £1.1bn on top of its original plans on “projects benefiting the environment”, although it did not give details of what these would be.

The new total investment of £19.8bn would still require customer bills to rise by 40%, reaching an annual average bill of £608.30 by 2029-30.

But Thames also said it could potentially increase investment by another £1.9bn, although that would lead to average bills rising by 44% to £627.

Thames is by no means the only water company planning big prices rises over the next few years.

In plans put before Ofwat in October last year, Southern Water proposed a 66% price rise on top of inflation, while Severn Trent put forward a 37% increase.