Menu
13/09/2013
Ofwat To Challenge Thames Water Increase Request
Water regulator Ofwat has said it will challenge Thames Water's request to increase customer bills by as much as 8% from next year.
The increase could see an additional £29 added to an annual average household bill.
The regulator has said it will assess Thames's application in order to determine whether the increases are justified. It will examine the firm's evidence of increased costs and has considered what counter-claims it should investigate on behalf of customers.
Counter-claims are an established part of the regulatory regime, and could reduce the level of any bill increases by deducting gains made by Thames over the current regulatory period.
Ofwat is able to make counter-claims where a company has not delivered outputs for which customers have been paying.
It has now provided notice to Thames that it is making three such counter-claims relating to:
The regulator will also look at whether Thames has benefited from wider economic circumstances beyond its control, and whether it can deduct these gains through an established regulatory process called the 'substantial favourable effect' mechanism.
As Thames is the only company to have applied for an additional increase in bills before the next price review, Ofwat will only examine whether there is a case for clawing back gains through this mechanism from Thames.
Ofwat's Chief Regulation Officer Sonia Brown said: "We have been clear that we would challenge Thames' proposed bill increase. So we are looking to see if there are areas where we can claim money back for customers."
The regulator will publish its draft decision on the application in mid-October, with any price increase coming into effect from April 2014.
Ofwat sets limits on the prices water companies can charge and these rules apply for five years. Its last price review in 2009 set limits for the 2010-15 period.
(JP/CD)
The increase could see an additional £29 added to an annual average household bill.
The regulator has said it will assess Thames's application in order to determine whether the increases are justified. It will examine the firm's evidence of increased costs and has considered what counter-claims it should investigate on behalf of customers.
Counter-claims are an established part of the regulatory regime, and could reduce the level of any bill increases by deducting gains made by Thames over the current regulatory period.
Ofwat is able to make counter-claims where a company has not delivered outputs for which customers have been paying.
It has now provided notice to Thames that it is making three such counter-claims relating to:
- underspend on sewer flooding
- a significant slippage in part of Thames' investment programme for sewage treatment
- not adequately maintaining parts of its wastewater network.
The regulator will also look at whether Thames has benefited from wider economic circumstances beyond its control, and whether it can deduct these gains through an established regulatory process called the 'substantial favourable effect' mechanism.
As Thames is the only company to have applied for an additional increase in bills before the next price review, Ofwat will only examine whether there is a case for clawing back gains through this mechanism from Thames.
Ofwat's Chief Regulation Officer Sonia Brown said: "We have been clear that we would challenge Thames' proposed bill increase. So we are looking to see if there are areas where we can claim money back for customers."
The regulator will publish its draft decision on the application in mid-October, with any price increase coming into effect from April 2014.
Ofwat sets limits on the prices water companies can charge and these rules apply for five years. Its last price review in 2009 set limits for the 2010-15 period.
(JP/CD)
Related UK National News Stories
Click here for the latest headlines.
16 October 2013
Water Regulator Temporarily Block Price Increase
A proposed price increase by Thames Water, who had sought to add an additional £29 to annual household water bills, has been blocked by Ofwat. The water regulator has published a draft decision blocking the proposed price increase.
Water Regulator Temporarily Block Price Increase
A proposed price increase by Thames Water, who had sought to add an additional £29 to annual household water bills, has been blocked by Ofwat. The water regulator has published a draft decision blocking the proposed price increase.
28 September 2007
Thames Water Fined £12.5 Million
Thames Water has been fined a total of £12.5 million by industry regulator Ofwat, it has been revealed. Ofwat said that the company had been fined for failing to provide it with "robust information" and because poor processes and systems meant that customers received poor service.
Thames Water Fined £12.5 Million
Thames Water has been fined a total of £12.5 million by industry regulator Ofwat, it has been revealed. Ofwat said that the company had been fined for failing to provide it with "robust information" and because poor processes and systems meant that customers received poor service.
12 August 2013
Thames Water Asks To Increase Prices
Thames Water has submitted an application to adjust its prices for the current price control period, which runs from April 2010 to March 2015. The organisation made the submission to industry regulator, Ofwat.
Thames Water Asks To Increase Prices
Thames Water has submitted an application to adjust its prices for the current price control period, which runs from April 2010 to March 2015. The organisation made the submission to industry regulator, Ofwat.
21 June 2006
Thames Water misses target on reducing leaks
Thames Water has missed its target for reducing leaks for the third consecutive year, it has been revealed. The water firm had a target, set by water regulator Ofwat, of losing no more than 860 million litres of water per day. However, the company missed its target by 34 m l/d. However, Thames Water also announced a 31% rise in profits to £346.
Thames Water misses target on reducing leaks
Thames Water has missed its target for reducing leaks for the third consecutive year, it has been revealed. The water firm had a target, set by water regulator Ofwat, of losing no more than 860 million litres of water per day. However, the company missed its target by 34 m l/d. However, Thames Water also announced a 31% rise in profits to £346.
04 July 2006
No leakage fine for Thames Water
Thames Water has escaped being fined by regulator Ofwat for failing to meet its targets on leakage reduction. However, Ofwat has ordered the firm to invest a further £150 million in order to reduce leaks. Thames Water had been facing the prospect of being fined £140 million. The news is likely to lead to criticism of Thames Water.
No leakage fine for Thames Water
Thames Water has escaped being fined by regulator Ofwat for failing to meet its targets on leakage reduction. However, Ofwat has ordered the firm to invest a further £150 million in order to reduce leaks. Thames Water had been facing the prospect of being fined £140 million. The news is likely to lead to criticism of Thames Water.
-
Northern Ireland WeatherToday:A few fog patches at first, soon clearing to leave a dry day with some patchy cloud and good sunny spells. Light and variable winds. Feeling mild in sunny spells. Maximum temperature 14 °C.Tonight:Dry and quite chilly overnight under prolonged clear spells and light winds. This will allow a few fog patches to develop in places. Minimum temperature 2 °C.
