Water and sewerage bills to rise by more than 3%
The average household water and sewerage bill in England and Wales is forecast to increase by 3.5%, or about £13 per year, says Ofwat.
In 2009, Ofwat made its decision on how much water and sewerage companies could charge customers between 2010-2015.
The regulator's challenge of companies' proposals means that across England and Wales average bills have remained broadly in line with inflation and are 10% lower than what companies originally called for.
However, this is before inflation is factored in, which is added to bills on a year-by-year basis. Since 2009-2010, the average bill has risen slightly below (by 0.7%) the rate of inflation.
Ofwat CEO, Regina Finn, said: "Customers can't choose their supplier. It's our job to make sure they are protected. Back in 2009, companies wanted bills rises of 10% above inflation. That didn't chime with what customers told us they wanted, so we said they could only increase bills in-line with inflation.
"We understand that there is huge pressure on household incomes, and any rise is unwelcome. Inflation is driving these increases.
"These rises will help pay for investment of around £1000 for every household in England and Wales. This will deliver real benefits - from continuing to improve the reliability of supplies to dealing with the misery of sewer flooding for thousands of customers," she said.
The bill changes for this year will come into effect on April 1 2013 and apply until March 31 2014, while the impact of the new charges will vary for individual household customers depending on the supplier and whether or not they have a water meter.
According to Ofwat, customers' bills are helping pay for an investment programme worth around £25bn between 2010-2015, which will allow companies to ensure customers continue to see improvements and receive a safe, reliable supply of drinking water.
Last week Ofwat announced proposals to change the way it regulates the water and sewerage sectors to drive more efficient, customer-focused companies, and ensure more sustainable water use.
The regulator also welcomed a report on the Draft Water Bill, which has identified potential benefits of £2bn by changing the way water is managed.
Commenting on the need for change, Regina Finn said: "There are longer term challenges if we are to continue to keep bills down. Unpredictable rainfall, and population growth in areas where water is already stretched, means we need to get better at managing and sharing our water. If we don't, customers will lose out.
"Our proposed changes, combined with recommendations in the Draft Water Bill, mean there is a total of £3bn worth of benefit on the table for customers if we make the right changes. We cannot afford to stand still, if our water supplies are to remain both affordable and sustainable in the decades to come."