Full story
Ofwat weighs surge pricing
Water regulator Ofwat is considering proposals that would allow suppliers in England and Wales to factor “water scarcity” into bills during drought, with the aim of reducing consumption.
“factor “water scarcity” into bills”
The Guardian reports the proposals are being likened to surge pricing, and they follow Ofwat’s consultation on changing wholesale charging rules that ended on July 30.
LBC says Housing Minister Matthew Pennycook denied suggestions that water companies could raise bills during drought and told Nick Ferrari at Breakfast: “There are no plans for surge pricing in relation to water bills.”
If approved, LBC adds the proposals could come into force from April and would rely on households having smart meters to let suppliers monitor water consumption.
Burnham anger and trials
The Guardian says the proposals came “just a few days after the prime minster, Andy Burnham, said he was angry with water companies” and accused them of treating customers like a “blank cheque.”
The Guardian also reports that on Thursday Ofwat allowed five companies—Southern Water, Thames Water, Severn Trent, Wessex Water and South East Water—to raise bills more than originally planned before the end of the decade to allow for billions of pounds of extra spending on repairs and infrastructure.
In a trial described by The i Paper, around 14,000 households served by Anglian Water in Lincoln and Norwich were tested under surge pricing, and the company said almost half of those involved cut their water usage.
The i Paper says another trial for around 5,200 customers served by Bristol Water, Bournemouth Water and South West Water set prices 50 per cent higher during summer months but 50 per cent cheaper during the rest of the year, with trials set to run until October.
Who pays and what’s next
LBC says the regulator has already permitted water firms to increase bills by 36% between 2025 and 2030, and it quotes Pennycook arguing the government needs to “get a grip” on the water industry.
“get a grip on the water industry”
The Guardian reports that an Ofwat spokesperson said: “The efficient use of water is in the best interests of everyone, including businesses,” as the regulator prepares a final decision shortly after its July 30 consultation.
The i Paper adds that if Ofwat approves the plans, they could be in effect from April and would require homes to be fitted with smart meters, while also noting essential water usage such as bathing, cooking, and flushing toilets was exempt from higher tariffs in a similar US scheme.
LBC says Pennycook also argued for greater control over bills, adding that the average bill in the UK is “just over £600,” while for those with Thames Water in south-east London it is “closer to £1,000.”
