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Ofwat to Reject Thames Water’s Proposed Bill Increase

18 Oct 2013

Ofwat has published a draft decision that would disallow Thames Water’s request for an interim increase in prices next year. Thames had asked to add an extra £29 or 8% to the annual average household bill. Ofwat’s draft decision is subject to a short period of technical consultation, which allows for the submission of new evidence. A final decision is due in early November.

Ofwat has examined the evidence of increased costs provided by Thames Water in its August application. Under the regulatory rules, Thames must 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.1 This threshold equates to a bill increase of around £9 or above. Having examined Thames Water’s evidence, Ofwat believes their application falls below this threshold, with the company only providing sufficient evidence for increased costs associated with an annual bill increase of £7.

Ofwat’s Chief Regulation Officer Sonia Brown 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.”

Ofwat’s consultation on its draft decision gives all parties, including Thames Water, the opportunity to submit new evidence. Ofwat will consider any new evidence, which could then result in a change in its assessment of justifiable costs, before announcing its final decision in early November.

Story appears courtesy of Ofwat