Water firms await charges decision

Published: Friday 12th December 2014 by The News Editor

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Britain’s water companies will today be told how much they will be allowed to charge millions of households over the next five years.

Most have said they will cut bills in real terms over 2015 to 2020 but the biggest, Thames Water, wants to charge more to help pay for the £4.2 billion Thames Tideway Tunnel.

Thames has asked to be able to raise bills by an average of £8 each year, meaning they will be £40 a year higher at the end of the period. It serves around 14 million customers in and around London.

The company argues that but for the tunnel its bill changes would be in line with rivals.

Thames was one of three water companies told in August that its plans for bills over the period fell well short of Ofwat’s provisional expectations. The others were Bristol Water and United Utilities.

Firms submitted initial bill plans for 2015-20 a year ago and the regulator has since been consulting with many of them and trying to make them scale charges back.

In May, it said two companies, Dwr Cymru Welsh Water and Northumbrian Water, had agreed to hold down bills by more than previously expected.

In its draft determination in August, Ofwat said it expected household water and sewerage bills to be about 5% lower on average in real terms over the next five years.

The figure, which excludes inflation, is based on its provisional view on price controls for all 18 water companies in England and Wales, with a final decision due today.

Thames has previously clashed with the regulator, last year being slapped down over plans for a one-off £29 bill hike for 2014, because of unforeseen costs including customers failing to pay bills, as well as the Thames super sewer.

The company’s tax arrangements have also been controversial. It has said it does not expect to pay any more corporation tax for up to a decade, as investments of £1 billion a year enable it to defer liabilities.

Thames is owned by Kemble Water Holdings, whose investors include Australian investment firm Macquarie Group.

Published: Friday 12th December 2014 by The News Editor

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