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Thames Water has joined the growing list of companies to accept the final determinations set out by Ofwat.
The company was one of three significant outliers during the price review process, alongside United Utilities and Bristol Water, which were collectively asked to cut back their bsuiness plans by £1.3 billion and were considered the most likely to reject Ofwat’s controls.
Although United Utilities accepted the final determination from Ofwat, Bristol Water has rejected the price control and the case is set to be referred to the Competition and Markets Authority (CMA).
In its draft determination in August 2014, Ofwat told Thames Water it needed to close a £331 million “gap” between its business plan and the regulator’s projections on its costs for the Thames Tideway Tunnel.
The final determination means that average bills for Thames Water customers in 2019-20 will be £336 (excluding the projected impact of the Thames Tideway Tunnel Infrastructure Provider (IP)), which is 4.1 per cent lower than current average bill levels.
Including Thames Water’s projected bill increase in respect of the IP, bills in 2019-20 would be £362, a total of 3.3 per cent higher than current average bill levels. This is lower than the projected bill increase of 10 per cent in Thames Water’s December 2013 business plan.
In a statement accepting the price control, Thames Water said: “Our firm commitment and hard work to improve service to our customers continues, with our £8.5 billion five-year plan delivering value for money on the things they have told us matter most.
“Our bills remain the third lowest amongst water and sewerage companies, while work to improve our ageing infrastructure to make it fit for the future carries on seamlessly thanks to sustained, record levels of investment.”
Affinity Water, Anglian Water, and Severn Trent are also among the companies that have accepted the final determinations from Ofwat.
The deadline for a company to accept the final determination is 12 February.
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