Volumetric charging for water is fairest approach for U.K.


Anna Walker,
chairman of
the Office of the
Rail Regulator
London, U.K. — (METERING.COM) — December 9, 2009 – Charging by volume for water used, and therefore installing meters, is the fairest approach to charging in Britain, the independent “Walker review” on charging for water and sewerage services has concluded.

There is a strong case for metering where water is scarce and the benefits outweigh the costs, for high discretionary users who may not be paying for what they use currently, and on change of occupancy. However, the case for metering is less compelling when water is not in short supply. But with metering becoming more widespread, there is a transition from one charging system to another already under way.

The Walker review, conducted by Anna Walker, who is also chairman of the Office of the Rail Regulator, was established to examine the current system of charging households for water and sewerage services, and to make recommendations on any actions that should be taken to ensure that England and Wales have a sustainable and fair system of charging in place.

If the review’s recommendations are adopted, approximately 80 percent of households in England will be metered by 2020 but a lower number in Wales because of the availability of more water.

Walker says that two clear messages emerged from the consultations, that the charging system should incentivize the efficient use of water to ensure sustainability of supply, and that water, as an essential of life, also needs to be affordable, particularly to those on low incomes.

The review recommends that the UK Government and Welsh Assembly Government should revisit the policy on household water metering in the light of climate change projections, expected population growth and the latest work on catchment assessment management strategies. While not recommending universal compulsory metering, the review says that in areas where the wider cost benefit analysis indicates that it would be beneficial, systematic, area wide metering schemes should be rolled out. Further, companies should adopt systematic metering of high discretionary users and on change of occupier.

The water regulator, Ofwat, should give assume a proactive leadership role in this transition, and it should develop an agreed methodology for assessing the costs and benefits of metering.

The review also notes that as metering and billing technology is advancing rapidly for both energy and water, there are potential synergies in coordinating water and energy metering. Ofwat should set up a smart water meter group, bringing together the Environment Agency, water companies and others to ensure that metering in the water and energy industries are considered alongside each other and that the water industry does not miss any opportunities to benefit from the national rollout of smart energy metering.

The report highlights that affordability is already a real issue for some groups of customers and in high cost areas such as the south west. A package of help, including help with bills and proposes water efficiency schemes, is recommended closely targeted on customers with low incomes.

Nevertheless, prices should continue to be regional reflecting water costs.

“Most of us find water and sewerage services cheap – less than a £1 per day for some households,” said Walker. “But the future looks rather different. A combination of significant population growth, the effects of climate change and the need to renew what is often Victorian infrastructure will put increasing pressure on both the availability and the cost of water. We need to tackle these challenges now, before they become major problems. The charging system can play an important role in this.”