Thames Water gets green light for bill rises

Thames Water will be allowed to increase customer bills by just over a third by 2030 after a decision by the industry regulator.

- Anna Isaac

Ofwat will announce today that the heavily indebted company, which serves 16 million customers in London and the Thames Valley area, will be permitted to raise bills by just over half the level the water firm had demanded.

Ofwat will allow Thames to raise bills by more than 33% over the next five years. The company had requested a 59% increase.

The decision represents a softening in stance from Ofwat, which said in July that its preliminary view would be to allow Thames to increase bills by 22%, equivalent to a £99 increase to £535 a year by 2030.

Thames later said that if it was not allowed to raise bills by 59% - an increase of £228 a year by 2030 - it "would prevent the turnaround and recovery of the company", as relations between Thames and Ofwat appeared increasingly strained.

The company is also poised to receive a fine from Ofwat for two payments it made: a £37.5m dividend in October 2023, and a further £150m payment in March. The fine is expected to be far smaller than the £104m one Ofwat issued in August after an investigation into sewage discharges. It will probably be in the tens of millions, sources said.