Affinity Water, the UK’s largest only water company, will be the first water company in England to trial a new-approach tariff for how customers are charged based on how much water they use.
Affinity Water have been working with Ofwat and the Consumer Council for Water (CCW) throughout the process of developing the trial, and Ofwat are now calling on more water companies to trial innovative ways of charging customers.
The trial will go live on the 1st October 2023 and will involve a group of around 1,500 Affinity Water customers in the SG1, Stevenage postcode area in Hertfordshire.
Research conducted by Affinity Water shows that just over half of their customers think the ‘rising block’ tariff structure would be fairer, with others interested to find out more information on the trial.
Not only do Affinity Water want to explore how changing the way they charge for water could be fairer, but they also want to see if water bills are more affordable and if customers are encouraged to use water more wisely. This will help protect precious water supplies and the local environment for the future.
James Tipler, Head of Financial Support & Service Delivery at Affinity Water said:
“The aim of our tariff trial is to discover if a different way of charging makes water bills more affordable for our customers and if it better encourages customers to save water. We estimate that at least two out of three households in the trial will pay less for drinking water if their usage stays the same.”
The WaterSave Tariff is the first of its kind to be trialled in England and is part of a wider series of trials that Ofwat is supporting.
Emily Bulman, Director at Ofwat, said:
“We welcome Affinity Water carrying out this trial and will be talking to them about their findings. We are all very aware of the impact of the rising cost of living and we want to see the water sector become more active, assertive and inventive to support customers who are struggling to make ends meet. New approaches on charging could do this, while also boosting sustainability by helping save water.
“Now more than ever, it is time for water companies to show they get and can respond to the needs of their customers. Bills are a huge concern to customers, and we need to see radical fresh thinking from companies”.
The clean water only utilities company have designed the WaterSave Tariff in line with their findings from previous research conducted into alternative tariff designs. This research includes surveys by external experts, insights from affordability studies and learnings from previous trials carried out by themselves and others in the water industry.
The WaterSave Tariff will be based on a rising block charge with a different price applying to the first, middle and end blocks of water consumption. Each block is associated with a certain amount of water. Under the tariff, the first block will be completely free, with progressively higher prices applied to the larger volumes of water in the middle and end blocks.
For customers in the trial, meters will be read every 3 months. As all meters involved in the trial can be read automatically (AMR meter), there will be no inconvenience to customers in obtaining these readings.
A comparable group of 1,500 customers will be selected to act as the control group. The two groups will be matched as closely as possible for water consumption and will represent a range of socio-economic groups. All customers in the trial and control groups will have a water meter that can be read automatically.
Andy White, Senior Leader for Social Policy at CCW, said:
“The way customers are billed for their water hasn’t changed in 30 years. With 1 in 4 households reporting that they are struggling to pay their water bills, it’s great to see Affinity Water exploring new ways of charging customers.”
“This innovative attitude can make bills more affordable, as well as protecting our environment by helping customers understand how much water they use and how they can use a bit less.”
“We’d encourage other water companies to urgently consider trialling alternative charging options to help alleviate the pressure on people’s finances and the water environment.”
Affinity Water have already contacted all customers in the trial group in September to let them know they have been selected for the WaterSave Tariff trial. These customers will also receive a covering letter with their October 2023 bill to confirm that they have been selected for the trial.
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