London, U.K. --- (METERING.COM) --- November 27, 2009 - Under a new determination from the water and sewerage economic regulator for England and Wales, Ofwat, water companies will invest more than £22 billion in maintaining and improving services, including the installation of 2.4 million meters, over the next five years.
Currently approximately 37 percent of household customers in England and Wales have water meters. By 2015, this proportion will increase to about 50 percent, and to 57 percent in areas that are classified as seriously water stressed (mostly in southeast England).
These plans form part of Ofwat’s final determination on the prices water and sewerage companies can charge their customers for the period 2010 to 2015. Under the determination Ofwat expects that the average bill across England and Wales will remain essentially flat in real terms to 2015, decreasing by about £3 to £340 per annum.
The water companies in their business plans had requested an increase of 9 percent, amounting to an increase of £31 on the average bill.
“People can shop around for the best deal on many things, but not water. Our job is to do this for them,” said Regina Finn, CEO of Ofwat. “Customers have told us that they want us to keep water and sewage charges flat while maintaining a safe, reliable supply of water. That’s what we’ve delivered.”
Ofwat says that in the long term, it believes all customers should pay for water according to how much they use. In most cases, customers are setting the pace at which companies move towards fully (or near-fully) metered charging, as they are able to opt have a meter installed free of charge. However, companies can also help set the pace of metering and for example they are entitled to install meters when there is a change of occupier at a property.
In addition, in areas that are defined as seriously water stressed, companies are enabled to install meters at their discretion. The determinations support extensive compulsory metering for Southern, South East, and Veolia Southeast, and for Southern and Veolia Southeast household metering levels are expected to be at least 90 percent by the end of 2015.
Other areas for investment will include improvements to water treatment works and to the water delivery infrastructure, as well as to maintaining and improving drinking water quality.
Water companies also will be expected to meet their targets for leakage and water efficiency, with the total leakage expected to drop slightly from 3,294 Ml/day in 2010-11 to 3,243 Ml/d by 2014-15 and total water efficiency savings averaging 25.9 Ml/d.
In total the water savings that companies will make by 2015 by meeting water efficiency targets, reducing leakage, and increasing metering should amount to more than 100 billion liters per year, Ofwat says.
The response to Ofwat’s determination has been mixed. Pamela Taylor, chief executive of the water industry body Water UK, said that doubts remain about the balance that Ofwat has achieved.
“Companies must ask themselves if the settlement will allow them to meet the needs of their particular customers and local environments,” said Taylor. “In the end it is the companies that take responsibility for the delivery of two of society’s essential services, not the regulator.”
However, the NGO Waterwise welcomed Ofwat’s determination and managing director Jacob Tompkins said the organization supported the increase in the level of metering, adding: “All stakeholders now agree that metering is the fairest way to pay for water, so we would like to see a meter in every home by 2020, supported by measures to protect vulnerable groups.”