Thames Water Fined £1

As per International Business Times:

"Ofwat has fined Thames Water just £1 after the regulator found that the group misreported sewer flooding data in 2010 which, in turn, impacted the amount the firm charged customers.

Ofwat, formally known as The Water Services Regulation Authority, confirmed in a statement that Thames Water agreed to "pay a package worth £86m [€109m, $147m] to customers and the communities it serves."

However, out of that total value, only £7m will be given back to customers. A total of £2m will be placed in a fund to help those who are having difficulty paying their bills, while the remaining £5m will "support additional community projects such as local programmes to better protect rivers and improve the natural environment."

The bulk of the "pay package" (£79m) actually constitutes a promise to reduce Thames' regulatory capital value (RCV )- which refers to asset costs and investment that has been put into the water company – in order to "benefit customers for years to come."

RCV is used for setting bills so, if this number is reduced, consumer bills will be lower."

Thames Water Applies For Price Hike

Thames Water have applied to water regulator Ofwat to charge customers a one-off surcharge of £29 pounds. Thames Water claim that they have been forced to deal with "unquantifiable" costs that they were not aware of when Ofwat set price limits back in 2009.

The increased costs include:

• Increases in bad debt as a result of the economic downturn
• Increases to Environment Agency charges
• The costs of operating and maintaining the additional 40,000 km of sewers that were transferred to Thames Water by the government in October 2011
• Costs of land acquisition and other preparatory work required for the construction of the Thames Tideway Tunnel

In the real world, companies that are eager to maintain/increase their profits seek to improve customer service, undercut the competition (ie charge less) in order to attract more customers and cut their cost base. In the delusional world of water supply, Thames Water simply opt for the easiest option namely that of charging their hapless customers more for their water. Ofwat will make its decision within 3 months.

There is of course another option, outwith cutting their cost base, they could reduce the dividends paid to their shareholders.

Will they do this?

Will they fark!