Thames Water wants extra £29 from each customer

HOUSEHOLDS could have to pay an additional one-off £29 on top of their usual water bill next year.
Thames Water, Britain’s biggest water company with 14 million customers, has submitted an application to Ofwat, the economic regulator of the water industry in England and Wales, to ask for the extra payment.
The firm says that it needs the money to combat bad debt caused by some customers not paying bills, and increases in Environment Agency charges.
It also says the money will be used to cover the cost of operating and maintaining the additional 40,000km of sewers transferred to Thames Water by the Government in October 2011 and the construction of the River Thames tideway tunnel.
Thames Water argues that even if the additional payment is approved, its bills would still be among the lowest in the country.
The financial plan, which was published on Monday, comes less than two weeks after the utility firm announced that bills could rise to 1.4 per cent above the rate of retail price index inflation from 2015 to 2020.
Reacting to the announcement, Defra minister and Newbury MP Richard Benyon said: “Of course I feel concern for my constituents who are on low incomes about these proposed price increases. I don’t want to see prices increase any more than they have to, but I also want rivers cleaned up and creaking Edwardian sewers replaced.”
A spokesman for Ofwat, Ben Fisher, said: “We are very aware that customers’ household incomes are stretched and that any potential bill rises will be unwelcome. We will consider a range of factors before making a decision.”
He added that it was only the 13th time since privatisation in 1989 that a water company had requested a pricing change within the existing five-year pricing period and that, so far in the current period, no other water companies had requested a price increase.
Ofwat now has until November to make a decision on the proposal, and if approved, bill-payers will be forced to pay the £29 extra, on top of the average household bill, which currently stands at £354 a year.
Thames Water was criticised recently when its end of year accounts, released in June, revealed that it paid no corporation tax on pre-tax profits of £144.9m.
The same report showed that £92m was handed out to shareholders in the form of dividends, while their chief executive received an increase in salary and a £274,000 bonus.
Customers also reacted angrily when faced with a 6.7 per cent increase on bills in the past financial year.
A spokesman for Thames Water, Simon Evans, said: “I am not going to comment on individual pay, but our executive pay is by no means out of step with other organisations and by no means the highest.
“Our shareholders wouldn’t invest in us if they didn’t get a steady return. They invest billions and their return is already down by half from last year.
“We didn’t pay any dividends in the second half of last year because we didn’t think it was appropriate but we are a business and that is how business works – it is right that shareholders get a sensible level of return.”