Thames Water, the heavily indebted water firm, is trying to persuade the industry regulator Ofwat to permit raising consumer bills by 40% or more to fund environmental projects. The company, which intends to spend an extra £1.1bn between 2025 and 2030, had its original plan rejected by Ofwat, which initiated questions over the company’s future. Thames had originally proposed investing £18.6bn in its plan, in addition to increasing customer bills by 40% excluding inflation over the five-year period. Shareholders at Thames’ parent company Kemble Water withdrew a proposed cash injection and defaulted on debt interest payments after Ofwat dismissed this proposal.
Thames has now disclosed that it is planning to spend an additional £1.1bn on top of its initial plans on environmental projects. Additionally, the company said that it could support increased investment of another £1.9bn, which would result in a 44% increase in customers’ bills. Ofwat’s verdict on the revised Thames Water plan, which is set to come at a critical meeting on 23 May, will comprise a “draft determination” of what water companies will be allowed to charge from the next year. Thames Water’s operating company has assured its 16 million customers that it has enough reserve to continue delivering water and waste services until May 2023.
Thames Water Chief Executive Chris Weston noted that the company has updated its business plan to deliver more projects that will benefit the environment, focusing on customer priorities. However, the company’s huge debts have sparked rumours that it could be taken over by the government. Weston said, “We will continue to discuss this with our regulators and stakeholders”. It remains to be seen if Ofwat will approve Thames’ latest plan, which would increase bills for millions of consumers across the country.
Thames Water’s plan to focus on environmental projects comes amidst various concerns over water supply and usage in the UK. Several authorities have warned of continued regional water shortages, with climate change adding to the issue. The Thames plan, if approved, could help improve the situation and provide cleaner and more efficient water to millions of UK households
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