As four of the six biggest electricity companies have raised their prices within the last month, waste and water services provider Thames Water has been told by industry regulator Ofwat that their proposed price hike of 8% has been blocked.
The proposed rise was almost three times the rate of inflation, adding an extra £29 to the average bill.
Water companies need the permission of Ofwat to raise prices beyond the limits set by the regulator for five year periods (the limit is currently 4.6%, which works out around £16 increase). Thames Water claimed that their proposed rise in prices was needed to help cover the cost of bad debts.
However, Ofwat’s chief regulation officer Sonia Brown said:
“We said we would challenge Thames’ 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.”
Ofwat’s chairman Jonson Cox recently wrote to water companies asking them to consider whether they need to increase their bills by the full amount allowed within their limits, “given the hard time their customers are facing”.
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