The Consumer Council for Water today (11 August) warned that Thames Water has proposed an average bill increase of 16% above the rate of inflation by 2015. This means that the average water and sewerage bill in the region could rise from £280 in 2009 to £329 by 2015 before inflation.
The proposed price increase is being published as part of Thames Water’s draft business plan, which will be used as a starting point for the discussions that will decide water price limits up until 2015. The exact amount that the company will be allowed to raise prices will be decided by the economic regulator, Ofwat, in November 2009.
Reasons given for the price increases include new European Union and UK government policies on water conservation, the cost of installing water meters as part of a more intensive metering program, and work needed to further reduce leakage.
David Bland, Chair of the Consumer Council for Water London and South East, said: “The Consumer Council for Water, together with other industry bodies, asked Thames’ consumers what they want from the company between 2010 and 2015. Customers made it very clear that reducing leakage was of paramount importance, and we are encouraged that Thames Water is addressing this proactively.
“Thames Water’ plans also need to take account of significant population growth in an area already classed as water-stressed by the Environment Agency. We agree with Thames’ proposal for a new reservoir, as consumers in the area have told us that a safe, reliable service was important to them.
“However, we believe that customers will be concerned with price rises on this scale, especially in light of many other household bill increases.
“We are concerned about the impact that Thames’ intensified metering programme will have on certain groups of customers. Customers have told us that they see meters as the fairest way to pay for their water, but while some are likely to save money by switching to a meter, others will not. The potential to introduce social tariffs is some way off and needs careful consideration and assessment before being implemented.
“The proposal of high price increases and more water meters, combined with the rising cost of energy bills could hurt many households. London has some of the country’s poorest areas, and the government needs to seriously consider ways to help those who cannot afford to pay for their water.
“The Consumer Council for Water was consulted as Thames developed these plans, and Thames did a thorough job of consumer research while putting them together, but it will take time to compare the company’s pricing and investment plans against our own research to make sure that consumers receive a package of benefits over the next five years at a price that they are willing and able to pay.”