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LONDON (Reuters) – Thames Water and other British water companies have said they need to raise bills by more than they had estimated, blaming new regulatory requirements and investment costs, regulator Ofwat said.
Ofwat had previously said it would not allow the water companies to jack up prices without evidence that such increases were justified.
It said on Tuesday the companies had provided new evidence to show they were facing increasing demands from the environment and drinking water regulators, raising the prospect that it could agree to some demands.
Ofwat wants to keep bills down for consumers, but the companies say they need to charge more to pay for new pipes.
British finance minister Rachel Reeves weighed in earlier in October, saying regulators needed to be “much more aware of the importance of investment in the sector”.
Thames Water, which has warned it could run out of money in months without a funding lifeline, is at the forefront of a crisis in the privatised industry where ageing infrastructure has left sewage leaking into waterways.
Ofwat said it was considering the companies’ requests as it weighs the evidence ahead of its final decision on consumer bills for the 2025-2030 period, due in December or January.
The funding crisis at Thames Water has raised financing costs for many of the companies, making infrastructure investment more expensive.
Thames wants average annual bills to rise 53% to 667 pounds by 2029-30, while Southern Water wants them to rise 84% to 772 pounds, with the average request at 40%, according to Ofwat.
That compares to the average 33% increase the companies had asked for earlier in the year and the rise of 21% Ofwat proposed in July.
The companies said about half of their additional demands were due to requirements from the Environment Agency and the Drinking Water Inspectorate, while the rest was down to increases in their business plans.
“This increased expenditure request will, if approved, increase customer bills compared to our draft determinations,” Ofwat said on its website.
(Reporting by Sarah Young and Paul Sandle; Editing by Christina Fincher)