Average bills are set to rise from 1 April by 6.9 per cent and 8.4 per cent for metered and unmetered customers respectively.
The company said water costs are falling in real terms but this is outweighed by rising sewerage charges.
Spokesperson Ronan Larkin said: “The increases are unavoidable because of the effects of inflation and the substantial cost of necessary improvements to the water and sewerage infrastructure to meet standards and improve quality.
“For customers, the improvements in the infrastructure have helped to deliver the best ever drinking water quality and have helped to reduce our impact on the environment through improved sewage treatment.
“However, we are very conscious that these are difficult economic times for our customers. We have, therefore, gained agreement to limit any tariff increases as much as possible.”