Customers are anticipated to receive a rebate below £7 each from Thames Water next year, amidst the company’s escalating issues with sewage management.
Thames Water faced the steepest financial penalties issued by the regulatory body, Ofwat, on Monday. The regulator mandated that the largest supplier in the UK return £100m to its customers due to a noted “deterioration” in river pollution levels.
This penalty was the highest individual fine, with Ofwat stating that underperforming suppliers are required to give back £114m in total, owing to inadequacies related to sewage, leaks, and customer satisfaction. The reimbursed amount will reflect on customer bills.
The most recent annual performance report from Ofwat disclosed a 22% rise in pollution incidents last year for Thames Water, positioning it among the lowest ranks for customer satisfaction.
Nevertheless, the £100m rebate from Thames Water will provide minimal relief to customers. Based on calculations by The Telegraph, customers are set to see an average deduction of £6.70 on their yearly bills starting in April. Thames Water has opted not to comment on this figure.
The rebate follows two months after the UK’s principal supplier received a £750 million support from shareholders, aiding its fight against nationalisation. The company’s executives acknowledged a need for an additional £2.5 billion by 2030.
A spokesperson from Thames Water remarked, “We are committed to providing excellent service to our customers, and we apologise for any instances where we fail to meet this standard at the first instance.”
They noted the effectiveness of the company’s turnaround plan, stating, “We’ve observed a 28% decrease in complaints, marking the second substantial year-on-year reduction. Additionally, there have been advancements in various essential performance commitments, including decreases in sewage discharges, internal sewer flooding, and sewer blockages.”
According to the report released on Monday by Ofwat, none of the UK’s water companies achieved the top “leading” status. Instead, 10 companies were rated as “average”, while seven were categorized as “lagging”.
The companies at the bottom of the performance list included Anglian Water, Dŵr Cymru, Southern Water, Thames Water, Yorkshire Water, Bristol Water, and South East Water. Southern Water, the second-lowest performer, was mandated to refund £43 million.
The total industry rebate of £114 million was balanced by financial rewards to some companies, such as Severn Trent, which received £88 million, and United Utilities, which obtained £25 million.
Annually, Ofwat evaluates the performance of water companies in England and Wales against the targets established in 2019 for a period extending until 2025.
David Black, Ofwat’s chief executive, commented, “The goals we established for the companies were intended to be challenging – aiming to foster enhancements for both customers and the environment. However, our most recent report indicates a shortfall, resulting in £114 million being reverted to customers through reductions in bills.
While this may be favourable for those paying bills, it’s a letdown for everyone anticipating progress in the sector.”
