Trialling different household charges

In April 2023, the water industry regulator Ofwat changed the rules on how water companies charge household customers for their use of water. This was to allow them to carry out trial schemes where – for an agreed period of time – a specific group of customers could be charged in a different way to others supplied by that company.

The idea was to make it easier for companies to explore how different ways of structuring charges might better encourage the efficient use of water and/or help make bills more affordable for some customers struggling to pay.

We support this approach and believe that the schemes can be useful in informing how water companies charge for services in the future.

The way charges are regulated means companies cannot collect more money overall from their customers. But it could result in some individual customers paying more than they did previously, while others could pay less during the trial.

Companies must consult with CCW in developing each scheme. We make sure the company puts in place appropriate safeguards to ensure customers in vulnerable circumstances are adequately protected or excluded from the trials.

Tariff Trials currently underway

The WaterSave tariff trial was introduced on 1 October 2023 and will run for 2 years. The objective is to explore how changing charges for water could be fairer, more affordable and encourage customers to use water more wisely.

The trial involves a group of around 1,500 Affinity Water customers in the SG1 postcode area.

The WaterSave Tariff is based on a rising charge for set amounts of water – called blocks. A different price applies to the first, middle and end blocks of water consumption.

  • Block 1: the first 30,000 litres of water per year will be free.
  • Block 2: the next 215,000 litres of water per year will be charged at £1.51 per 1,000 litres.
  • Block 3: each 1,000 litres of water used over 245,000 litres per year will be charged at £4.00 per 1,000 litres.

A fixed/standing charge of £12 per year will apply to all.

The company expects 2 out of 3 customers in the trial will pay less than previously but very high users will pay more.

Protections

Customers supported through the following schemes due to high essential water usage and/or low income have been excluded from the trial:

• Low Income Fixed Tariff (LIFT) customers
• WaterSure customers

South West Water is planning to commence a trial of a seasonal tariff during 2024.

For those customers in the trial water usage costs will be higher during periods, such as summer, when demand for water is usually higher, and lower during other times.

South West Water will be in touch with households selected for the trial before it launches.