Image description: Water running from a tap into a green glass that is overflowing. Image by Andres Siimon / Unsplash
Thames Water says it has agreed to defer its appeal of the regulator’s decision on how much it can raise customer bills while it races to secure a rescue plan funded by its creditors in the coming weeks.
It had previously asked the water watchdog to refer its price review to the UK’s Competition and Markets Authority (CMA). It was among a number of utilities firms urging regulators to allow them to charge customers more for bills than previously granted, having argued that what was allowed by Ofwat was not enough to support investment and improvement plans. The company had sought a 53% increase to customer bills between 2025-30. Ofwat allowed 35%. Doing so was “in the interests of our customers and the environment”, Thames said in February, and the CMA recently granted similar applications by five other suppliers.
The UK’s biggest water firm has now agreed with Ofwat to defer the case until further notice.
The water utility and its lenders are trying to secure a long-term rescue deal before the first tranche of an emergency lifeline runs out as early as the end of the year. Thames is currently focused on a private sector solution to its financial crisis that would see a group of its biggest creditors take control of the company – averting the prospect of a Special Administration Regime.
The consortium, calling itself London & Valley Water and which includes Elliott Management and Apollo Global Management, set out proposals for a £20.5bn investment and turnaround plan over the summer.
It has also given a series of ownership commitments under efforts to convince Ofwat and the government they have a viable plan to restore financial, as well as operational, stability to the company.
Thames receives 1 star rating
The BBC reported Thames Water has been given a one star rating for its poor environmental performance by the Environment Agency (EA) in 2024, as part of a scathing assessment of England’s water companies.
All but one of the nine English water and sewerage companies were rated as “requiring improvement” – or worse – by the EA, in a year where serious pollution rose by 60% versus 2023.
It is their worst combined score since the assessment process began in 2011.
Industry body Water UK acknowledged that “the performance of some companies is not good enough” but said there were some signs of improvement.
A Thames Water spokesperson said: “Transforming Thames is a major programme of work that will take time; it will take at least a decade to achieve the scale of change required.”