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Thames Water could be forced to repay customers

There's evidence that Thames Water's attempts to add 490 million pounds to its customers' water bills has badly backfired. The industry regulator, Ofwat, has refused permission for the rise - and we've learned that the firm could now face a "clawback" of money it has already taken.

Our Consumer Editor Chris Choi explains.

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  1. National

Ofwat: Thames' extra bill increase was not justified

Water regulator Ofwat has rejected a bid by Thames Water for an additional price hike for 2014 to 2015 of 8%.

We said we would challenge Thames' application, in the interests of customers. We did just that and on the evidence provided we are not convinced that an extra bill increase is justified.

– Ofwat's chief regulation officer Sonia Brown
  1. National

Ofwat rejects Thames Water's bid for 8% bill rise

Water regulator Ofwat has turned down Thames Water's application for an additional price increase for 2014 to 2015.

The water regulator Ofwat has ruled Thames Water's price hike must remain at 1.4% above inflation. Credit: Press Association

Ofwat says it was for Thames Water to justify the proposed 8% increase was in customers’ interests.

Within the three month timescale for assessing the application, the water regulator found the evidence the company submitted did not justify its proposed £29 additional increase in customers' bills.

Ofwat’s decision means the maximum that Thames can add to customers’ bills for 2014-15 is still 1.4% above inflation, as set in the 2009 price review.

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Water bill hike: company statement

Thames Water has released the following statement regarding the planned increase in water bills:

"We previously made it clear that bills need to rise to pay for the cost of the Thames Tideway Tunnel and are now able to give our customers advance warning of the likely increase and the timing. Ofwat [the water and sewerage regulator] sets limits on water bills in line with the work that water companies need to do, and will scrutinise the Thames Tideway Tunnel costs to ensure they are kept as low as possible."