Tasmanians will see a 3.5 per cent increase to water bills each year until 2025-26. 

Tasmania's economic regulator has approved maximum annual price increases of 3.71 per cent for each year until 2026.

This came after TasWater proposed a price increase of 3.5 per cent each year, in line with an agreement it signed with the Tasmanian government and the TasWater Owners' Representatives Group to limit annual price increases to 3.5 per cent until 2024-25.

TasWater is honouring that agreement, and it setting the rise at 3.5 per cent.

It is the first-time prices have increased since July 1, 2018. 

The typical residential customer will face an annual bill increase of $43 in 2022-23, and by 2025-26, the average bill will be around $180 more than it was this current financial year.

The increases are partly aimed at covering TasWater's significant capital expenditure programme and its associated operating costs, as well as increases in the cost of debt and inflation.

The increase comes in well below TasWater's estimate of a 6.5 per cent annual increase to achieve full cost recovery by 2025-26. 

TasWater will now submit an updated price and service plan reflecting the decisions set out by the regulator, who is set to approve TasWater's plan in late June 2022. 

TasWater says the “conservative price increase will be used by TasWater to continue delivering quality service to our customers, updating ageing infrastructure, improving our service standards, and protecting the health of Tasmanians and the environment”. 

The Tasmanian Council of Social Services says the price rises will add to broader cost of living pressures, and has called for a freeze on service fee increases.