Ofwat disallows Thames Water interim price hike
Thames Water's request for an interim price increase next year has been disallowed by regulator Ofwat. Announcing its draft decision, Ofwat said it did not believe the current evidence justifies an increase in customers' bills.
In August, Thames Water applied for the interim increase which would add an extra £29 or 8% to the annual average household bill. It is seeking the price increases to cover four areas:
- The Tideway Tunnel land acquisition costs, where £273M has been spent
- The costs of operating and maintaining the additional 40,000 km of sewers following the Private Sewers Transfer in October 2011
- Increases in bad debt as a result of the economic downturn
- Increases in Environment Agency charges
Ofwat's draft decision to disallow the increase is now subject to a short period of consultation to enable new evidence to be submitted. All parties, including Thames Water, now havethe opportunity to submit new evidence, with Ofwat expected to make a final decision in early November.
Sonia Brown, Ofwat’s chief regulation officer, said: “We said we would challenge Thames Water’s request. We have looked at the details and do not believe the current evidence justifies an increase in bills.”
The regulator said Thames Water had to "satisfactorily demonstrate that the level of increased costs is above a certain threshold to permit any additional increase in bills between five-yearly price reviews". This threshold would equate to a £9 or more increase in bills.
Ofwat said Thames Water had only provided sufficient evidence "for increased costs associated with an annual bill increase of £7".
Thames Water issued a statement in response to Ofwat's decison, saying: “We will review Ofwat’s draft proposals, and submit our response in due course.”
- Acoustic sewer innovation wins national utilities prize Ground-breaking technology which detects sewer blockages using acoustic pulses has won the Innovation of the Year award... Read More >
- Bazalgette Tunnel to deliver Thames super sewer Thames Water has named the special purpose company Bazalgette Tunnel as the preferred bidder to deliver the Thames Tideway... Read More >
- EA to use drones to detect illegal water abstractions Drones will be used for the first time this summer to gather information about illegal abstraction in East Anglia's... Read More >
- Scottish Water starts planning for the long term For SR21, Scottish Water is moving away from the traditional approach to business plans and developing a blueprint for the... Read More >
- Football teams and water companies: Closer than you think New season, new league, new challenges... Egremont Group's Owen Quinn and Alex Graham on the parallels between football... Read More >
- Abstract concept: How can water companies reduce abstraction? Despite concerns over supplies, water companies face pressure to reduce abstraction. As part of our Utility of the Future... Read More >
- The end of 'business as usual' in the water sector? James Connolly, head of partnerships at digital asset and works management company eviFile, assesses the message coming... Read More >
- Data Protection and Brexit - Is your organisation prepared? Guidance to help businesses and charities continue to comply with data protection law after the UK leaves the EU Read More >