Welsh Water says the average household bill will only rise at the rate of inflation from 2010 to 2015.

Thames water expects bills to rise by around 3 percent a year above inflation during the period, and Northumbrian water said its rate would be 1.3 percent above. Manchester United Utilities said it plans to raise prices by 2.7 percent above inflation.

Industry regulator Ofwat has requested that all water firms must submit their draft spending and pricing plans for the five-year period starting from 2010.

Welsh Water said it would invest £1.5bn before inflation, or £1,000 per household on average during the period. The money is to be used to protect the quality of the water, improve water treatments, support new infrastructure and reduce the risk of repeat sewer flooding to properties. The firm’s average house bill will be around £390 before inflation.

United Utilities said its capital investment for the period would be £4bn, of which £1.6bn would be for water services, while the remaining £2.4bn will be for water waste services. However, it added that it would reassess its costs when it submits its final plan to Ofwat in 2009 “in light of financial market conditions at that time”.

The UK’s largest water company, Thames Water, said its £6.5bn investment plan would be the largest spending programme by a water company.

The company said that its customers had “the lowest bills in the industry for many years”, and although there would be “an inevitable impact on bills”, the firm would try to keep charges below the industry average.

Peter Antolik, Thames Water’s director of regulation, said that the money was “vital to improve London’s ageing water system.”

“We also have, it should be remembered, a growing population in London and the south east,” he said.

“We have, we estimate, about 380,000 more people coming in to the region and we have to make sure that our infrastructure, our networks, our treatment works are all ready to cope with that influx of people.”

The industry watchdog will decide whether to allow above-inflation prices at a time when customers are under financial pressure from rising fuel bills.

Ofwat chief executive Regina Finn said:  ”This is the start of the process of making decisions on how each company proposes to provide value-for-money, long-term, high-quality water services to its customers.”

“We will now examine draft business plans in detail, checking the proposed level of service and investment.

“We will make sure each plan includes everything we expect, takes account of concerns expressed by customers, and does so as efficiently as possible.”

Ofwat will make its final decision by November 2009.