Watchdog rejects Thames Water bid to increase bills by £29 Thames attempt to add an extra £29 to customers' water bills next year has been rejected by the industry regulator. Ofwat said the water and sewerage company, which serves about 14m customers in and around London, could only justify a bill hike of around £7 but that this would not be imposed on customers. Thames Water applied in August for a one-off price increase next year that would raise average bills by 8pc from £354, blaming customers struggling to pay their bills and the cost of a super sewer under London. But, in a draft ruling, the regulator said it was unconvinced by the company's calculations on bad debts, slashing Thames Water's assessment of £75m of extra costs due to "additional deprivation" to just £13m. Ofwat's chief regulation officer Sonia Brown said: "We have looked at the details and do not believe the current evidence justifies an increase in bills." It will make its final ruling early next month and invited Thames Water to submit fresh evidence. Thames Water is subject to a five-year price control period that runs out in 2015 but has said it needs to ask customers for more money to cover costs that could not be quantified at the time the price was set in 2009. It said the biggest item was £273m spent buying land for the Thames Tideway Tunnel, a major new sewer. It added that £16 of the extra £29 is accounted for by increases in bad debts - when customers fail to pay bills - due to the economic downturn. But Ofwat said it was unconvinced that Thames Water's analysis of the impact of increased deprivation on bad debt costs was "sufficiently robust."