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Ofwat has called on water companies to experiment with new ways of charging customers to help those in need and improve water efficiency.
The regulator said it wants companies to look afresh at how they calculate charges for water and, informed by data, develop and trial innovative and creative charging models that differentiate between customers and their water usage.
This could enable them to provide targeted support to customers struggling to pay their bills or encourage behaviours that improve sustainability, eliminate leakage and lower consumption.
Customers are currently charged a flat amount based on their type of property or a flat rate on their usage as measured by a water meter.
Ofwat said it is not prescribing any specific approach but ideas it is asking companies to consider include seasonal charging to lower water bills in the winter when energy costs are higher or reduced bills for homes with water butts and permeable driveways, which reduce the risks of flooding and pollution being released into rivers.
It said customers who use a lot of water, for example those with swimming pools, hot tubs or large sprinkler systems, could be charged a premium for higher levels of water usage, particularly at times when water is scarce.
The regulator encouraged companies to explore what can be learnt from other sectors and countries.
Commenting on the plans, which have been put out for consultation, Ofwat chief executive David Black said: “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.
“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.”
Ofwat noted that regardless of the form of trials and pilots, its customer protections will remain in place, including the overall limits on what companies can charge.
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