Thames Water is proposing to raise its bills by 45% over the next five years to over £50 a month, as it grapples with an £18 billion debt that threatens its stability.
The struggling utility has outlined a nearly £20 billion investment in its infrastructure to address leaks and sewage spills in a new business proposal submitted to regulators.
The company is striving to fend off nationalization, which could result in its lenders losing up to 40% of their investments.
This plan, known as PR24, is pending approval from the regulatory body Ofwat, which is focused on protecting consumers from unwarranted bill increases. Ofwat is expected to publish its preliminary decision in June.
Thames Water plans to raise typical bills from £433 annually in 2023 to 2024 to £627 by 2029 to 2030, marking a 45% increase to an average of £52.25 per month.
This development follows the decision last month by shareholders not to provide the company with the £500 million lifeline previously promised as part of a planned £3.75 billion funding package intended to support the company until 2030.
Thames Water has updated its business plan on its website, detailing potential increases in average bills over the next five years to either £608 or £627.
The higher £627 figure, which would result in monthly bills rising by more than £50, depends on whether Ofwat permits an additional £1.9 billion investment to address storm overflows and pollution.
In the original plan released in October, the company aimed to increase annual bills to £608 by 2030, a slight reduction from the previously forecasted £611, after cutting some operational expenses.
This adjustment would still represent a yearly increase of £175 from the average bill of £433 in 2023 to 2024. The company acknowledged these as “some small changes to parts of our plan.”
Chief Executive Chris Weston commented, “Our business plan is tailored to the priorities of our customers. As part of the regular discussions surrounding PR24, we have revised it to include additional projects that will benefit the environment. We will keep engaging with our regulators and stakeholders on these updates.”
