Thames Water asks regulator for an extra £1.1 billion to fund projects that ‘benefit the environment’

Thames Water said this morning it would increase its spending plan, as submitted to water regulator Ofwat, by £1.1 billion after consultation with stakeholders.

In a statement postponed from last week to today, the company said its now updated PR24 business plan, which will cover the regulatory period 2025-2030 (known as AMP8), had been submitted to the industry regulator.

The company said the new plan would result in total capital expenditure for the period of £19.8 billion, which “will be focused on projects that benefit the environment.”

According to the company, these projects would include: “Maintaining safe, high-quality drinking water, ensuring security of water supply, delivering further environmental improvements and building greater network resilience to address aging assets, climate change and tackle population growth.”

Thames Water is the latest of all water and sewerage companies to submit its plan for the period, which the regulator requires under a five-year price review process known as PR24.

Ofwat will announce its draft decision on the plans in June, with a final decision made by the end of this year.

Despite the increase in spending, the company said there would likely be no impact on consumer bills outside of current plans. Average consumer bills are expected to rise to £608 by 2030, according to forecasts.

Thames will continue to look for opportunities to deliver further investment in AMP8 and has proposed placing a further £1.9 billion of potential investment into a so-called “Deliverability Assessment Mechanism”.

The new business plan suggests that if Thames were to invest the full £1.9 billion in AMP8, annual average customer bills would rise further by £19 over that period.

Chris Weston, CEO of Thames Water, said: “Our business plan focuses on our customers’ priorities. As part of the usual ongoing discussions regarding PR24, we have now updated it to deliver more projects that benefit the environment. We will continue to discuss this with our regulators and stakeholders.”

The controversial water company is in the eye of the storm due to the increasing debt pile and the financial health of its parent company, Kemble Water Holdings.

Fears of nationalization have grown increasingly throughout 2024, reaching a peak last week when a secret plan to nationalize the company and move billions of pounds of its debts onto government books was reported in the Guardian.

Thames Water has been contacted for comment.