Split Water Tariffs

Split Water Tariffs

The water companies and the UK government have an ambition to reduce average household water consumption across the UK to 110 litres per person per day by 2050. The average customer in Affinity Water’s region uses 152 litres per person per day, in comparison with a rest-of-the-UK average of 141 litres per person per day.

In response, Affinity Water is thinking of introducing a split tariff with a differential rate between each of two types of water use: a lower rate for essential use, and a higher rate for discretionary use.

• Essential use would include water for drinking, cooking, washing clothes and personal hygiene.
• Discretionary use would include watering the garden, washing the car and filling paddling pools / hot tubs / swimming pools.

There is also currently a ‘low income fixed tariff’ (LIFT) which “supports customers who might struggle to pay for use of large amounts of water due to medical reasons, or those in large families.”

• What benefits can you see in a rate like this?
• What challenges can you see around implementing and using such tariffs?
• Do you think Affinity Water should introduce a tariff like this? Why / why not?
• How does it compare to electricity companies which have high and low peak rates for example?

I assume that almost everyone has a water meter these days. Maybe I am wrong. For any customer without the use of a water meter, the exercise would be futile because nothing they did to change their water use would be measurable. However, customers with a water meter would have the opportunity both to benefit financially, and to use water conscientiously. I like the idea of a 'smart water meter' that can be read digitally from inside the house. In the context of a split tariff, customers would be easily able to see how much water they are using daily, weekly and monthly. Our (on-street) water meter is formally read only twice each year, on the basis of which our bills are calculated. However, ever since the major mains pipe burst (which cost me an absolute fortune) I have read the meter daily.

My family (me, my wife and our severely disabled daughter - a lot of extra clothes washing) use 158 litres of water per day between us. We use all the water we need, and I work hard to ensure that we waste as little water as possible. I consider our usage to be well within any essential use targets. I should be enthusiastic to pay a lower tariff.

I consider the proposal for a split tariff to be an excellent idea. There are several reasons why I support this idea, but I also have a significant reservation:

There should be consultations about: 

• what uses should be considered essential use
• how much water per person is considered to be essential
• setting the tariffs for essential use and for discretionary use.

In my view, essential use is a vital part of public health. I should prefer it were the essential use tariff to be zero-rated. Discretionary use should include not only the activities mentioned above, but also wasteful use - such as leaving a tap running, or not fixing leaks – of both of which I have been guilty.

Dividing between the two uses should be an excellent tool to help customers to focus on their actual water use. Instead of simply being required to respond to pleas to "use less water", customers will have a clear metric. I believe the very division will be instrumental in Affinity Water saving water.

The idea of essential use / discretionary use does not match split electricity tariffs. Split electricity tariffs involve the electricity companies trying to 'spread the load', not reduce electricity consumption. We have Economy 7, which means doing our best to use electricity at off-peak times. Your idea, on the other hand, is about trying to limit consumption - I do not imagine that you care what time of day people draw water from the pipes.

My reservation, and it is very important for me, is that my garden is not a recreation area, it is my family's pantry: my wife and I grow a lot of our family's fruit and vegetables. Every summer now there is a serious drought in the North Downs of Kent, and irrigation is required. I would like there to be a 'horticultural tariff' or a “horticultural allowance” so that I am not required to choose between essential water use for my family or saving the potatoes and brassicas from death by aridity. This would probably involve the installation of a separate water meter. Either that, or provide me with the means with which to store winter rainfall.

More broadly, however, there are two questions that should be answered:

• How much water does Affinity Water waste every year by failing to mend burst water mains in a timely fashion? Is this volume of water comparable to reducing domestic water use?
• How much more money will shareholders receive in dividends by Affinity Water not having to supply (collect, store, extract, clean and distribute) as much water to customers?