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Water firms in England and Wales consider drought surge pricing

Ofwat is reviewing whether suppliers can add “water scarcity” to customer charges during droughts, with a final decision expected soon after its 30 July consultation.

Reported · Written up by our desk · Industry

Water companies in England and Wales are exploring a pricing model that would allow them to raise bills during droughts by factoring in “water scarcity,” according to the Guardian Business. The proposals are tied to efforts to reduce consumption and are being likened to surge pricing.

The Guardian Business reports that Thames Water is among five companies looking into the approach, alongside Southern Water, Severn Trent, Wessex Water and South East Water. The move comes after Ofwat allowed a set of firms to raise bills more than originally planned before the end of the decade, to support billions of pounds of additional spending on repairs and infrastructure.

The proposals follow public and political backlash over rising water bills during years when sewage has continued to flow into waterways, the outlet said. The Guardian Business also notes that the industry faced added scrutiny after the summer heat and dryness, when leading parts of England and all of Wales were declared officially in drought.

Ofwat’s consultation on changing rules for wholesale charging concluded on 30 July, with the regulator expected to share its final decision shortly, the Guardian Business said. The report also points to criticism over water loss through leaky pipes, which campaigners argue exceeds the amount that could be saved through a nationwide hosepipe ban.

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