Thames Water may raise fees to £627 per year to assist in fixing leaks

Thames Water has revised its spending estimates for 2025 to 2030, increasing rates to £627 annually to rectify its leaking network, pledging an additional £3 billion over five years.

After pledging to invest an additional £3 billion over the next five years, Thames Water may increase rates to as high as £627 annually in order to rectify its leaking network. The troubled water provider announced on Monday that, following talks with the industry watchdog, Ofwat, it had revised its spending estimates for 2025 to 2030. It filed a PR24, or business plan, with Ofwat in October, promising to spend £18.7 billion during that time and boost bills by 40% to £610, ignoring inflation, which would result in a 56% increase in bills.

Thames plans to invest an additional £1.1 billion ($19.8 billion) to address environmental issues related to sewage disposal in the industry, and may invest an additional £1.9 billion ($21.7 billion) over time, depending on labor availability in its supply chain. This could result in 16 million customers receiving bills totaling £627 by 2030, a 44% increase from current levels.

Thames is under strict scrutiny due to concerns about its financial stability and shareholders' willingness to pay for investments upfront before they are recouped from customers. The £1.1 billion funding is expected to be used to ensure compliance with new environmental protection regulations by the Department for Environment, Food, and Rural Affairs.