According to its business plan, submitted today to the regulator, average household bills will increase from £358 a year in 2013 to £398, plus inflation, in 2020.
The company, which had its application to raise bills by £29 next year rejected by Ofwat, said it also needed to invest £5.1 billion into other infrastructure between 2014 and 2020.
The total investment package, amounting to nearly £8bn of upgrades to infrastructure between 2014 and 2020, is equivalent to £1,385 for each of the 5.7m households the company serves.
Martin Baggs, chief executive of Thames Water, said the Thames Tideway Tunnel was a “must-do project” which would stop tens of millions of tonnes a year of sewage entering the tidal River Thames.
“The current situation is simply unacceptable, which is why this project – developed over many years – has cross-party support and forms part of the Government’s National Infrastructure Plan,” he said.
Thames is the only company to announce an increase in bill prices above inflation so far, as all 19 water companies in England and Wales submit their business plans to Ofwat this morning.
Earlier today, both Southern and Anglian Water announced below-inflation rises for the five years between 2015 and 2020.
Thames also said it would introduce a social tariff in 2014, a year earlier than planned.
“We recognise that affordability is a significant problem. For customers genuinely struggling to pay their bills, we can and will do more to help. We are increasing the number of ways in which we will assist next year, bringing in important measures which were originally planned for 2015 and onwards,” said Baggs.