Water companies seek higher charges

By John Bowker

LONDON (Reuters) - Water companies said on Monday they planned to increase household water bills by up to 4.5 percent a year above inflation between 2010 and 2015 to pay for multi-billion pound investment plans.

Thames Water, United Utilities and Severn Trent were among the firms that submitted draft business plans for 2010-2015 to industry regulator Ofwat, the first step of a review held every five years which determines standards, investment and customer bills for the period.

The largest water company, Thames Water owned by a consortium led by Australia's Macquarie Group, announced one of the biggest increases, 3 percent above inflation, meaning bills for its 13 million customers will rise to about 329 pounds a year by 2015, up from just over 300 pounds in 2011.

"Thames's customers have enjoyed the lowest bills in the industry for many years, but we now need to make essential investment to secure their services for the future," Chief Executive David Owens said, adding that London's aging sewage system needed attention.

Smaller Southern Water, bought for 4.2 billion pounds last year by a consortium led by JP Morgan, hit its 4 million customers with the higher increase of 4.5 percent.

It said it needed to spend 2.6 billion pounds, and blamed stringent European environmental legislation for the severity of the increase, which will take bills in south-east England as high as 426 pounds a year by 2015.

United Utilities, focused more on north-west England, announced lower increases of just over 2 percent a year between 2010 and 2015 to help fund its own 4 billion pound ($7.7 billion) investment plan.

Its prices are currently higher than Thames's charges, but lower than Southern's. Its annual bills are now set to rise to 390 pounds a year from around 350 pounds in 2010, not including inflation.