Local residents were spared from a potential 8% above inflation price rise in water bills today as Ofwat turned down Thames Water's application for an additional price increase in 2014-15, in response to a letter from Chelsea & Fulham MP, Greg Hands.
In September, MP Greg Hands contacted Ofwat to urge the rejection of the proposed price rise that would have meant a rise of £29 per year in the average household bills of local residents, who are already facing average annual water and sewage bills of £354.
Writing to the water regulator, Greg urged Ofwat to not inflict the £4.1billion cost of the Super Sewer, which would be dug from south Fulham, onto water bill payers. Greg is still calling for a fundamental review of the whole project. Greg told Ofwat: “I believe that if the company wants to invest in this extravagant and unnecessary infrastructure, it should look to do so without further burdening their customers”.
In 2009 Ofwat set limits on prices for the period 2010-15. The regulator’s 2009 decision meant that Thames already had an allowance to increase its charges by 1.4% above inflation in 2014-15.
Thames Water was the only water company in the country to ask Ofwat to consider an additional increase to customers’ bills in August this year. Thames Water’s reasoning for an increase included a charge to fund land purchases for the Thames Tideway Tunnel.
Ofwat's chief regulation officer Sonia Brown said: "We promised we would challenge Thames's application, in the interests of customers. We did just that and on the evidence provided, we are not convinced that an extra bill increase is justified.”
Greg Hands added: “I am pleased that Ofwat has listened to the concerns of local residents and has reached a decision which recognises customer interests. As the MP for Chelsea and Fulham, I shall continue to question the need for the Super Sewer and will campaign to protect the interests of customers and families during the economic recovery”.
Ofwat’s decision means that the maximum Thames Water can add to their customers’ bills for 2014-15 is still 1.4% above inflation, as set in the 2009 price review. This is Ofwat's final decision on this application. Thames Water now has the right to appeal to the Competition Commission.