Thames Water bills to rise 35% by 2030 as company handed £18.2million fine
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Thames Water customers should brace themselves for a substantial increase in bills, as the industry regulator has approved a 35% increase by 2030, resulting in an average annual bill surging to £588, up from the current £436. At the same time, Thames Water was slapped with an £18.2m fine for forking out "unjustified" dividends to shareholders. Ofwat's ruling didn't match the 59% rise Thames Water had initially argued for leading up to the decision, as the company seeks a bailout.
The company, serving roughly 16 million people across London and the South East, faces a funding catastrophe and is scrambling to secure a £3bn lifeline from lenders to stay afloat past March. The £18.2m penalty comes after Thames Water paid dividends worth £158.3m, which Ofwat said was unwarranted. The watchdog insists on recouping £131.3m of these outlays from Thames Water to protect customer bills.
Ofwat's CEO, David Black, said: "We will take action against companies who take money out of these businesses, where performance does not merit it.". Suffering from a debt burden over £16bn, Thames Water recently underwent the first of several high court hearings regarding its proposed £3bn bailout. It seems the consortium of investment giants backing this rescue plan—namely BlackRock, Abrdn, and M&G—are demanding significant bill increases to facilitate the deal.
It remains uncertain whether the 35% bills hike will be sufficient for the bailout to proceed, given that the investors have also been in discussions with Ofwat in recent weeks. However, Thames Water will have the opportunity to refer Ofwat’s decision to the Competition and Markets Authority.
