April Bills to Jump 36% for Some Thames Water Clients

Feb. 21, 2005

In London and surrounding areas, thousands of Thames Water customers soon will be hit with huge rate increases, with some April bills set to soar by as much as 36 percent.

The price increase will affect about 50,000 customers who receive only their water from the German-owned company and not their sewage services, such as those who own septic tanks.

Customers who receive both services from Thames Water will see their bills rise by an average of 14 percent, plus inflation.

UK consumer watchdog WaterVoice said price increases are being weighted towards the water side of the service to reflect increased investment on that side of the business.

"Most of this year's investment is going to the water side of the business as we need to replace around 850 miles of Victorian pipes in London, explained Thames Water spokesman Nick Tennant. "A third of London's pipes are over 150 years old and the system is in urgent need of investment."

Each year, 40 percent of Thames’ potable water is lost due to leakage, the company estimates and therefore argued to industry regulator Ofwat that all bills need to rise by an average of the same 40 percent. The company will spend £3.1bn (about $5.9B U.S.) over the next five years updating its system.

However, regulator Ofwat has agreed to an increase of only 24 percent over the next five years.

Water customers cannot easily switch suppliers, as is possible with gas and electricity, so the increases will be an inevitability for most.

Tim Wolfenden, product director with uswitch.com, offers a possible solution for some consumers. He suggests consumers could potentially cut their bills by switching to a metered account. About 75 percent of the households currently are unmetered, and bills are estimated based on the size of their homes.

"You have to work out whether switching to a metered account would benefit you," Wolfenden explained. "For example, two people living in a six-bedroom house would probably be better off because their rate would be based on all six bedrooms being used, but four people living in a two-bed house should probably remain unmetered."

Source: This Is London