By Daniel Hunter

Thames Water could be on the verge of increasing prices, having approached industry regulator, Ofwat, for permission to do so.

It wants to put up bills by about £29 per household during 2014-15, but has asked Ofwat if it can spread the rise over more than one year.

The company says the rise is needed because of increases in Environment Agency charges and to cover the cost of preparing for the construction of the Thames Tideway Tunnel.

Ofwat will examine the proposal and make a decision in three months.

Thames Water is part-way through a price control period, which runs from 2010 to 2015 and was agreed with the industry regulator Ofwat in 2009.

However, the agreement allows firms to ask for a price increase if they encounter costs that were not expected or quantifiable at the time of the initial price-setting decision.

"At the beginning of a five-year period, there are always a small number of potentially significant costs and revenues that can be clearly identified, but not quantified," said Stuart Siddall, Thames Water's chief financial officer.

"Either the company or Ofwat can seek an adjustment, upwards or downwards, once the actual costs and revenues are known.

"That is what we are doing now."

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