Thames Water has filed an appeal with the UK’s competition regulator, aiming to raise customer bills over the next five years. According to the firm, the increase that was approved will not invest and keep it going, hence the Thames Water bill increase.
Urgent Need for Financial Stability
The utility provider faces an £18 billion debt burden and awaits court approval for a £3 billion rescue package. Without the short-term funding required to avoid nationalisation, there can be time to resolve issues. But, Thames Water must charge its customers more to survive, leading to a Thames Water bill increase.
Regulatory body Ofwat has approved a 35% hike in the bill between 2025 and 2030, which is much lower than the claim of 53% rise. Thames Water say Ofwat’s decision does not support the investment and improvements that are needed for a Thames Water bill increase. The company wants a settlement that has realistic targets and a fair spreading of risk and reward.
Investment Needs and Public Backlash
Thames Water must secure £3 billion in new equity to attract investors, who expect sufficient returns. There has been substantial scale criticism in the water sector regarding sewage pollution, with many stating that the profits have taken the front seat as a result of which environmental protection and infrastructure maintenance suffer. This criticism often coincides with discussions of the Thames Water bill increase.
Thames Water’s five-year spending limit is £17 billion. Ofwat imposed the cap in December. The firm had dished out a plan for an investment of £22 billion in the U.K. which was dependent upon an increase in prices. This is another factor contributing to the Thames Water bill increase.
The appeal process could take months, during which time Thames Water will remain strapped for cash.
The outcome will decide if the company can get the necessary funds to stay running. Moreover, it will see if the company is meeting regulatory and environmental standards.
