Affinity Water, the UK’s largest only water company, is announcing that it will be the first to introduce a new structure of charges for a group of its customers, as part of a trial to see how to make water bills more affordable. Its regulator Ofwat, is now calling on more water companies to trial innovative ways of charging customers.
The Company is set to see whether a new system of charging will be fairer and more affordable and will include a free allocation of water. The trial will also show if households’ consumption changes due to the tariff structure, as lower consumption will help sustainability by protecting precious water supplies and the local environment.
The trial tariff will be based on a rising block charge with a different price applying to the first, middle and end blocks of consumption. Research conducted by Affinity Water shows that just over half of its customers think it would be fairer, with others interested to find out more information.
The trial will take place this year and involve around 1,500 customers which have been selected in its supply area, cutting across income distribution and embracing both high and low usage customers with all being on meters. These results will then be compared to a similarly selected “control group”. The trial will be compulsory for those selected, but customers will be advised on what their new bill price may be based on their existing consumption. Certain customers in vulnerable circumstances will be excluded from the trial and there will be measures in place to monitor any changes throughout the trial period for all others.
Customers will also be informed of how they can reduce their bills even further by bringing down their usage, by signing up to affinitywater.co.uk/saveourstreams campaign and get water saving tips and free water-saving devices. Trial data will be published at a later date.
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”.
Emma Clancy, Chief Executive of the Consumer Council for Water said:
“We welcome Affinity Water’s new tariff trial and would like to see more companies pioneering new ways of making water more affordable, particularly for the one in five customers struggling to pay. We know water companies are increasing financial support for their customers, with record numbers benefitting from discounted bills, but there is scope to do far more to ease the pressure on struggling households. We will be watching with interest what the results of these trials show us and, in particular, the impact on low-income households”.
James Tipler, Head of Financial Support and Service Delivery for Affinity Water said:
“We want to be affordable and fair to all our 3.8 million customers across the South East of England. We want to obtain evidence on the impact of the tariff trial on affordability for our customers by comparing our trial and control groups.
By structuring the tariff in this way, we hope to see evidence that water bills become more affordable for more of our customers. We have estimated that at least two out of three households will pay less if usage remains unchanged”.
Details on the charges for our trial tariff can be seen in Section 13 of our Charges Scheme 2023-2024 document.