Thames Water made an appeal last month against the regulator’s draft decision to reject Thames’ request for an interim increase of £29, or an 8 per cent additional increase in customers’ bills.
However, Ofwat has reiterated today that the evidence the company submitted did not justify its proposed hikes.
Ofwat’s chief regulation officer Sonia Brown, said: “We said we would challenge Thames’ application, in the interests of customers. We did just that and on the evidence provided we are not convinced that an extra bill increase is justified.”
Thames Water can still appeal to the Competition Commission.
A spokesperson for the company said: “We will review the decision carefully before deciding on our next steps.”
Following Ofwat’s decision, the maximum that Thames can add to customers’ bills for 2014-15 is still 1.4 per cent above inflation, as set in the 2009 price review.
On 2 December, companies will submit their business plans for the next price review, which will cover the period from 2015 to 2020 and Ofwat says there is scope for reductions in bills from 2015.
“If companies do not propose reductions, they will need to fully explain to their customers why,” the regulator said.