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.”
- Servelec Technologies carrying out review of asset database A review of UKWIR's National Failure Database (NFD) for pipe assets is being carried out by Servelec Technologies. Read More >
- Organisations looking for inventors to help Dragonfly idea take flight Northumbrian Water, CGI and the Water Hub are offering inventors and creators up to £25,000 to help them turn an idea... Read More >
- Last chance to enter Water Industry Awards You have until midnight tonight to complete your entries for the Water Industry Awards 2020! Read More >
- Reaching net carbon zero In summer 2019, the water industry committed to reach net carbon zero by 2030. This is a very ambitious aim and... Read More >
- Meeting AMP7 leakage targets Damian Crawford, head of smart networks & leakage at Stantec, discusses how becoming data-rich and knowledge-smart can... Read More >
- Rewarding excellence WWT content director Alec Peachey looks ahead to next year's Water Industry Awards. Read More >
- Delivering a smart network Tom Mills, senior director UK&I at Sensus, examines what a smart water network really means - and how to get there. Read More >
- A watershed moment for the water industry? Tessa Harding, director of water at Thomson Environmental Consultants, discusses the government's Environment Bill. Read More >