Water firms to impose surge pricing during heatwaves and droughts
Customers who use smart meters may see their water bills surge during summer, as part of a new five-year pricing trial.
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The tariff trials, being introduced by 15 companies across the country, could see prices rise depending on customers’ individual use or seasonal surges.
Ofwat, the industry regulator, has said the trials will last 5 years, and prices will spike as water supplies become more scarce.
They have also said surges could potentially be extended to every customer in the UK.
“Customers who use a lot of water, for example those with swimming pools, hot tubs or large-scale sprinkler systems, could be charged a premium for very high use, particularly at times when water is scarce,” Ofwat has said in a report.
One iteration of the tariff by Anglian Water has called on customers to “reduce discretionary water use” during summer months, and would increase across-the-board tariffs on a seasonal basis.
However, Anglian Water has also called for separate fees for those who use sprinklers, hoses and other discretionary water sources.
They say these separate charges would be easier to implement through the nationwide rollout of smart meters.
Other tariff models are based on individual consumer habits, with price rises subject to use thresholds.
Severn Water has opted for a tariff which cuts prices under a 5,000 litre per month threshold. The tariff then maintains current prices between 5,000 and 10,000 litres, only then surging prices beyond 10,000 litres per month.
The average household can use around 438 litres of water on a normal day, according to Southern Water.
Thames Water has opted for a similar system, whereby customers will be charged double for their water if they consume upwards of 685 litres a day - as much as eight baths, or 13 wash cycles.
The announcement comes at a time when the Government is pushing for more households to adopt water smart meters, in hopes of preventing further hosepipe bans and water rationing.
Currently, roughly half a million UK households use smart metres for their water use.
As the UK enters its third heatwave period this summer, local authorities in the South East and Yorkshire have enforced hosepipe bans.
Households that break hosepipe bans will typically face a flat-fine of £1,000.
There are also concerns over water scarcity as reservoirs hit their lowest level in a decade, with experts calling for nationwide hosepipe bans.