The move, which was proposed in October last year, has been made to fund the delivery of the 2014 price review.
The regulator will now be able to recover up to an additional £27 million over the next five year investment cycle.
This additional funding was required because of “significant changes” in Ofwat’s approach to PR14 and the “scale of assurance required to guarantee its delivery”.
The regulator stated that the previous cap, of £9 million, was therefore “insufficient to allow it to recover the costs of carrying out the 2014 price review”, which increased by £5.6 million.
When the plan was put forward last year, Ofwat said it did not intend to recover the full £27 million but “considered it prudent to set the cap at 0.3 per cent to allow some headroom”.
The regulator added the hike would be a “one-off” and fees will come down again in 2015-16, once the price review process was completed.
However, it intended to retain the higher cap “to avoid another modification process, with the time and resource implications this has for us and the companies, should it be necessary to increase our fees, as we move towards the 2019 price review”.
The modifications came into effect from March 2014.