Water companies fight for higher bills despite outrage

Water companies are prepared to take their case to competition authorities if they fail to get their way with their plans to increase bills by up to 91 per cent.

In a key week, regulator Ofwat will announce on Thursday how much each utility in England and Wales can charge its customers for water and sewage over the next five years.

This could decide the fate of Thames Water, which supplies 16 million homes in and around London as it teeters on the brink with debts of £16 billion.

Thames Water says it will run out of money at the end of this month unless it secures a £3bn cash lifeline from its creditors.

On Tuesday, a High Court judge will hear from two rival groups of bondholders who will present their own emergency borrowing plans to prevent Thames Water from being plunged into special administration, a form of temporary nationalisation.

Separately, Thames Water is in talks with suitors about a capital injection, with previous shareholders declaring the company “uninvestable”. Potential buyers will wait and see if Thames is successful in its demand for a 59 per cent rise in bills over the period to secure much-needed investment in its creaking network of pipes and sewers.

Thames recorded 17,554 storm overflow spills in the first nine months of this year, compared to 14,428 in the same period in 2023. It blamed record rainfall.

Southern Water has unveiled plans to increase bills by 91 per cent, the biggest increase of any water company.

It is still subject to compliance monitoring after being hit with a record £126m fine in 2019 for “shocking” failings at its wastewater treatment sites. Each water company

in England and Wales is under investigation for pollution amid public outrage over huge dividend payments to foreign shareholders and huge bonuses to bosses.

Water companies want to increase bills by an average of £144 over the next five years, but Ofwat has provisionally capped the increase at £94.

Four water companies successfully challenged Ofwat’s last pricing decision in 2019 and won a more generous settlement.