Monday 25 July 2022: How I am billed for the water I use

Monday 25 July 2022: How I am billed for the water I use

How would you describe how billing for water currently works and how do you feel about it?

1. The fact that two different water companies are involved, Affinity Water to supply me with fresh water, and Southern Water to process (or not) my waste water, is a situation that I have still not yet got used to. Consequently, I receive two water bills, one from Affinity Water and the other from Southern Water. My water bill from Southern Water is determined by how much fresh water Affinity Water has billed me for. Therefore, the only way I am able to impact on my bill from Southern Water is by changing how much fresh water Affinity Water bills me for. In practice, especially during the months of the growing season, I recycle a lot of water for use in the garden, and, as a consequence, I am paying for a greater volume of waste water processing than I am generating. 

2. Tedious though it may sound, I remain entirely unreconciled to having to buy fresh water from, (and having to pay for my waste water to be processed by) a commercial company. I believe that all public utilities should be in 'public' ownership, and can remember the time when they were. I should very much rather be paying my water bill directly to the local municipality. Moreover, it is not as if, as a result of paying a commercial company, I am able to choose to be supplied with better quality water or  more reliable service (or, in the case of Southern Water, to pay a company that does not pollute the waterways and coastal waters). Notwithstanding the sterling efforts of Affinity Water to "reach out" to its customers, Affinity Water remains primarily accountable to its shareholders.

3. A principal reason for my belief that water should be in public ownership is that the supply of safe, fresh water and the processing of waste water, is a key component for the maintenance of public health. Both historically in Britain, and currently in many parts of the economically-under-developed world, public health is of poor quality because of the absence of safe, fresh water and the processing of waste water. John Snow (https://en.wikipedia.org/wiki/John_Snow). I believe that everyone should have a legal right to sufficient fresh water (and to have their waste water processed) to allow them to remain healthy and to maintain the public health. (Note, there is no reason to extend this legal right to owners of golf courses, or to car valeting services.) As it is, I am charged at a full rate for all the water that I use, regardless of whether it is for reasons of personal/public health or merely for recreation.

4. I consider the fixed charge (20% of my bill: my most recent bill: £14.46 out of £73.57) to be disproportionately high.

Water is currently charged at a flat rate, so the first litre costs as much as the ten thousandth. How do you feel about this flat rate charging?

I have already explained above that basic water use is about personal and public health. To charge customers at the same rate for water used to maintain personal and public health, and water used for recreation is unfair, albeit slightly differently, both on those people who cannot afford more than the bare minimum, and also on those people who choose to be economical in their use of water in order, say, better to protect the environment, and not consume fresh water for recreational purposes (instead, viewing water as a matter of personal and public health).

Imagine you are part of Affinity’s leadership team and have to decide the best way to price water. Please explain how you think people should be charged for the water they use and tell us why.

1. Ensure that every property is metered.

2. Eliminate the fixed charge.

3. Using electoral rolls, establish how many people the water bill covers. Establish whether this number includes any people with additional health needs, such as new-borns, and people who need to bathe/be bathed more frequently.

4. Allocate every person a water allowance, with a higher allowance for people with additional health needs.

5. Deduct water allowances from water usage. Bill accordingly.

In this way, people would be paying for discretionary use of fresh water, not for personal and public health use. 

Affinity Water is exploring an alternative way of billing – what’s called a Rising Block Tariff. This means that households pay more per unit of water as their water consumption increases, so using a high volume of water would lead to a higher bill than today. Using a low volume of water would lead to a lower bill.    

In other words – the more you use, the higher the rate you pay. 

For example:  

• In a month, the first 10,000 litres (about 120 baths worth) are charged at e.g., 0.4 pence a litre.  
• But any consumption above 10,000 litres would cost more, say 0.6 pence a litre.  
• For context, a typical family of four might use around 14,000 litres a month. In this case, the first 10,000 litres would be charged at 0.4 pence per litre and the remaining 4,000 litres at 0.6 pence 

• For the very highest of users, an ultra-high use block could be introduced, e.g., every litre used after the first 20,000 might cost 1.0 pence per litre 

Affinity Water has no current plans to change to this progressive tariff – it’s purely exploratory at this stage. Thus, they want to know: 

What are your thoughts on this type of billing? How do you think progressive tariffs would impact you and your wider family?

1. As a matter of principle, I consider the Rising Block Tariff to be superior to the fixed rate tariff. For this reason, I would prefer the Rising Block Tariff.

2. However, by not taking into account how many people are living in the property, an extended family (of say, two parents, two children, an adult dependent and a grandparent) will soon be into paying the 'standard rate'. In contrast, a single professional person might be hard-pressed to consume anywhere near 10,000 litres/month, even though a greater proportion of their water use might be discretionary.

3. For reasons I have stated above, I should prefer it were the 'basic rate' also more differentiated from the 'standard rate'.

4. I have no objection to there being a 'ultra-high rate', and indeed, with the caveats given above, would consider the use of differential rates to be a valuable instrument for encouraging greater water economy.

How effective do you think progressive tariffs would be in reducing water consumption?  Please explain your answer.

Somewhat effective:

1. By setting expectations about water consumption, Affinity Water can encourage customers towards conforming to those expectations.

2. By providing a financial incentive to conform to water consumption expectations, customers will have a motivation to do so.

3. On the other hand, wealthy people appear to behave as though they believe that if they have the money with which to do so, then their wealth entitles them to do as they choose, with less regard for the environment.

In terms of your own bill, what impact do you think this is likely to have, and why do you think this? 

I think that I shall end up paying the same. I find it hard to believe that Affinity Water would set the block boundaries and the different water consumption rates such that there would end up being much difference in bills for the average family.

Would you ever consider switching to this sort of billing by choice?  

Please tell us why you chose that answer. If you wouldn’t consider switching, is there any extra information or incentives that might encourage you to do so? 

Yes. I approve of a charging mechanism that makes some attempt to differentiate between basic needs and discretionary needs.

Taking all things into consideration, do you think a rising block tariff is a fairer way of charging for water than the current flat charge per litre? 

A lot fairer.

Have you any concerns or issues with the progressive tariff, or have anything else you want to say about it?

I have ticked "A lot fairer", although I might have ticked "A little fairer" - it all depends on the details. The closer to a charging mechanism that recognises the importance of personal and public health to basic need for water, and charges for discretionary use, the fairer I would consider a progressive tariff to be. This would include a basic water allowance per person, not per household.