Water giant Severn Trent, which supplies households in Shropshire and Mid Wales, today announced a planned hike in bills of £12 a year by 2015, a rise of four per cent.

Utility bosses say the average 0.8 per cent per year increase would be one of the lowest in the country.

Severn Trent delivered its five-year business plan from 2010 to Ofwat today, along with United Utilities which plans a 1.8 per cent rise annually and Northumbrian Water, which announced a 3.4 per cent rise per year.

Last week, Severn Trent announced the average household water bill for 2009/2010 would be £305, a rise of about 4p per day.

The proposal sets out how the company will deliver water and wastewater services, including details of revenues, costs, investment, maintenance, proposed price limits and improvements to services over the five-year period.

Tony Ballance, Severn Trent’s director of regulation and competition, said: “We believe our final business plan will deliver the improvements our customers want for a price that they consider to be good value.

“We plan to invest £2.6 billion to reinforce our water supply network, reduce sewer flooding and improve our local water environment, all within a proposed annual bill increase averaging 0.8 per cent, in real terms, for the five years.

“Our bills are already among the lowest in the UK, at 84p a day, and we plan to maintain that position.”

The plan is now in the hands of Ofwat, and will be used by the regulator in making its draft, in July, and final, in November, decisions on future consumer prices to take effect from April 2010.