Thames Water sewage spills spike as crucial bill decision looms

Thames Water has revealed a 40% spike in sewage spills while warning that a looming decision on what it can charge customers is “fundamental to our future”.

The UK’s biggest supplier, which has been battling to avert the prospect of a special administration amid a massive debt pile, has consistently argued that the regulator’s ruling on its request for an inflation-busting rise to charges could make it uninvestable.

Thames, and the wider industry across England and Wales, is due to learn next week what Ofwat will allow bills to rise by over the next five years.

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Thames is seeking hikes of 59% over the period, setting it on collision course with the regulator, as it says the determination will either help it unlock crucial new investment in the business or force it towards a taxpayer rescue.

Thames, which said it had improved on many of its operational performance targets over the first six months of the year, blamed record rainfall for the big rise in storm overflow incidents.

Spills are measured on a calendar-year basis and rose to 17,564 between January and September 2024, compared with 12,428 in the same period the previous year, Thames said.

Its statement added: “2024 saw the wettest Spring since 1986, according to the Met Office, with over 30 cm of rain in England.

“Rain or groundwater getting into our sewers is often the main cause of storm overflows, known as spills. In some areas, our system has been designed to operate in this way, though the circumstances of a spill may or may not be permitted.”

While the surge in sewage spills across the UK can be partly blamed on bad weather, critics say they are primarily a result of an industry that has historically put rewards above investment.

Thames is a prime example for those who argue that weak oversight has allowed firms to put profits before their customers.

The company insisted on Tuesday that it was no closer to collapse though it revealed a 7% rise in its debt pile to £15.8bn over the six month period.

That covered time before the company agreed a £3bn loan deal to keep it operating beyond mid-2025.

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Chief executive Chris Weston said the company had made “solid progress” on its attempted turnaround and that Thames had begun the process of trying to secure new equity in the business.

He signalled satisfaction with the numbers of interested parties but told investors: “The next critical step is receiving an investable Final Determination (from regulator Ofwat) which is fundamental to our future.”

Ofwat is due to rule on the companies’ business plans on 19 December.

They are collectively seeking a 40% hike to bills, with Southern demanding an 84% rise between 2025-30.

Thames has submitted a figure close to 60% in return for a leap in investment.

It has recently begun testing on the Thames Tideway Tunnel, which aims to reduce the number and amount of combined sewer overflows that spill into the River Thames by 95%.