Water firms will tap customers for an extra £156 per year by 2030, with Southern Water customers faring the worst, as they pledge bumper investment into improving the creaking infrastructure.
The companies want to double current infrastructure spending, taking it from £51 billion between 2020 and 2025 to £96 billion between 2025 to 2030.
But it’s customers, not shareholders, who look set to pay the price, meaning the average annual bill is likely to go up by £84 in 2025 before increasing to around £156 extra by 2030, although the exact amount will vary across providers.
Annual bills at the moment are already £448 on average, so by 2030 they could be nearly 35% higher.
As it stands, Southern Water customers could face a 64% increase by 2030, Thames Water customers a 41% hike, Severn Trent customers a 37% rise and United Utilities customers a 25% spike.
Environmental campaigner Feargal Sharkey said: “The water companies clearly want the bill payers to pick up the tab for their financial greed and mismanagement."
He got the sense that the request for higher bills from water companies is down to their finances.
Most water firms are highly geared, and future investment plans place further pressure on their finances, leaving shareholders nervous to pump in extra cash for no, or little return.
Water companies also face the charge that since privatisation they have paid out £66 billion in dividends and built up £54 billion of debt while at the same time failing to invest and upgrade creaking infrastructure.
Ofwat, for its part, insists that consumers will only be asked to pay for “future investment, not past company mistakes”.
David Black, Ofwat’s chief executive, has vowed the regulator will scrutinise bills to ensure “any increase is justified, efficient and delivers significant improvements in river and bathing water quality”.
In the square mile, share price reaction has been positive although some questions remain.
Broker Citi said it sees “the sector as offering an attractive long term growth, underpinned by statutory requirements, but we remain cautious in the run up to regulatory clarity, ahead of general election and pending balance sheet resolution”.