Severn Trent is to invest £190 million in renewable energy generation in the next five years.
The water supplier said it will spend the cash on solar and anaerobic digestion power plants.
That is expected to increase its energy generation from renewable sources by around 50% by the end of the decade – up from 28%.
“This will provide efficient green energy and a long-term hedge against volatile market prices,” the company said in a statement.
Its current green energy portfolio includes wind turbines, solar panels, hydropower plants and waste-to-energy plants across the UK.
Severn Trent also plans to cut costs of around £200 million in the next five years through renegotiation of supplier contracts and a new company structure in order to meet an efficiency target imposed by Britain’s water regulator.
It added customers will see their water bills fall during the same period, “by which time they will be around £60 below the industry average”.
The average water bill is estimated to decrease from £333 to £329 next year.