Water surge pricing plan sparks fury as minister insists there are "no plans" to raise bills during droughts
It emerged over the weekend that "surge pricing" could be approved, a practice in which bosses raise prices when demand is higher.
The proposals are now being considered by the sector’s regulator for England and Wales, but speaking to LBC, Mr Pennycook admitted he was "not impressed" by the reports and said the government’s priority was to "get a grip" on the situation.
He told Nick Ferrari at Breakfast: "There are no plans for surge pricing in relation to water bills, and I think the Prime Minister’s been really clear on this.
"He is angry, as I think I am, and many of your listeners will be.
"We have seen bills go up and up and up at the same time when serious pollution incidents are at record levels, where there are leaks aplenty that water companies are struggling to deal with.
"We have got to get a grip on the water industry. That’s what we’ve already been doing over the past two years, toughening regulations, strengthening enforcement, increasing oversight."
If approved by Ofwat, the proposals could come into force from April and would allow companies to adjust prices depending on the weather and the amount of water being used.
The scheme would rely on households having smart meters, which would allow suppliers to monitor water consumption, the Telegraph originally reported.
The regulator has already permitted water firms to increase bills by 36% between 2025 and 2030.
Thames Water was among five water firms which have been given the green light to raise bills further.
But Mr Pennycook added: "The Prime Minister has been very clear, we want to look at how the public can have greater control and how we can do more to ensure that bills are fair.
"The average bill in the UK, I think, is at just over £600. For those of us who’ve got Thames Water in south-east London, it’s closer to £1,000, and people aren’t seeing the fairness in their charging that we need to have."
A hosepipe ban was announced by the company, which covers London and wider parts of the South East and South West last month.
It comes as Wessex Water became the latest utility to announce a hosepipe ban, which will come into effect from midnight on Tuesday for all 1.4 million customers that it supplies with water across areas in Bath, Somerset, Dorset and Wiltshire.
It marks the first time in 50 years that Wessex Water has introduced a ban, having last put one in place during the infamous hot summer of 1976.
The UK has seen five heatwaves over the course of one of the driest summers on record, in which temperatures surged to highs of 37C in some parts of southern England on Thursday.
It was the first August day to see this threshold crossed since 2020, when 36.4C was recorded at Heathrow and Kew Gardens.
In a brief respite for Brits, forecasters are expecting a spell of rain and cooler weather this week, but another heatwave could arrive as soon as September.
Forecasters say low pressure moving in from the Atlantic will bring wind, showers and longer spells of rain to many parts of the UK in the coming days.
But temperatures are still expected to remain above average, with the Met Office warning there is a chance of another late-season hot spell - particularly in southern England.
Ofwat revealed in a draft determination last week that five of 13 suppliers across England and Wales are set to be permitted to increase charges for customers to pump in the additional investment by the end of the decade.
An Ofwat spokesperson said: "The efficient use of water is the is in the best interests of everyone, including businesses.
"The options we are progressing would support greater consideration of water scarcity and efficiency by water companies when setting their charges, and encourage more tariff innovation.
"We recently carried out a period of consultation on the proposals and will reach a final decision in the near future."
Technology & Business Editor
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