Bad debts, the cost of sewer maintenance and land purchases push the water company to appeal to the industry regulator. The UK's biggest water company has asked the industry regulator to increase its charges by almost £30 for each household. Thames Water submitted the application to Ofwat for an interim adjustment to prices over the current five-year price period. The company said: "If approved by Ofwat, the net impact would result in a single, one-off additional cost of about £29 per household in 2014/15, equivalent to nearly £6 per year over the five year period." The firm, which is owned by a global consortium led by Australia's Macquarie group, said it has spent £273m on acquiring land needed for the construction of the Thames Tideway Tunnel. It also said bad debt as a result of the economic slowdown has prompted the application. Thames Water said other factors were higher Environment Agency charges and the costs of operating and maintaining an additional 24,000 miles of sewers that were transferred to it by the Government in October 2011. It said: "But the company is keen to avoid such a spike in bills for its customers and is recommending to Ofwat that the additional cost is spread over more than one year." The company said its average bill this year is £354 but added that including the hike it would still keep the cost to customers among the lowest in the country. Thames Water Chief Financial Officer Stuart Siddall for said: "Ofwat resets price limits for each water company every five years, most recently in 2009, based on the best information available at the time. "Then, during the five-year period, almost all changes to costs and revenues, whether upwards or downwards, are up to us to manage. "However, at the beginning of a five-year period there are always a small number of potentially significant costs and revenues that can be clearly identified but not quantified. "These are set out at the time of the price review and either the company or Ofwat can seek an adjustment, upwards or downwards, once the actual costs and revenues are known. That is what we are doing now." Mr Siddall added: "These significant costs could not be quantified at the beginning of the current pricing period, and their scale is unique to Thames Water's operations, project commitments and catchment area. "Increasing prices is never good news, which is why the company and its shareholders are encouraging Ofwat to adapt its regulatory mechanism to allow the impact of the price increase to be spread over more than one year to avoid a spike in bills for our customers."

• published: 12 Aug 2013
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