Published: 02 March 2006
Every Drip Measured
The first water company to apply to the Government for the right to compulsorily meter all its customers has been given the go-ahead.
Folkestone and Dover Water Services' successful application for 'area of water scarcity' status means it will be able to accelerate its programme of switching household customers over to water meters (that programme is at present mainly voluntary).
The company could then charge all its customers according to how much water they use. The move is designed to help the company match limited supplies to increasing demands for water over the next 10 years as part of its longer term water resources planning strategy.
Elliot Morley, Environment Minister, said:
"In many parts of the country water is a precious resource which we can no longer simply take for granted.
Today's decision is a considered response to the specific long term challenges facing Folkestone and Dover water company; it is not a reaction to the short term problem of low rainfall in the south east of England.
Folkestone and Dover will face increasing difficulty over the next 10 years in matching its limited water resources to the growing amount of water used. Metering will have an important role to play in helping to reduce this demand as well as sending a signal about the benefits of water saving.
I will be paying particular attention to the sensitive introduction of meters to households and to the effects on customer bills, especially of those least able to pay.
The vulnerable groups scheme already in place will provide protection from high metered bills for customers with large families or certain medical conditions who are in receipt of certain benefits.
I am encouraged by work done by the company which suggests that at least 70% of the customers to be metered will pay the same or less with a metered supply."
Folkestone and Dover Water Services serves more than 65,000 households and the population in its area is set to grow. The company expects to increase the number of households metered in its area from the present 40% to 90% over the next 10 years. The company estimates that metering these households can reduce their water use by 10-15%.
The view of the Environment Agency is that an increase in metering could provide about half the margin of supply over demand that the company needs by 2015.
However, metering should be viewed as only part of the solution and the company is also expected to follow other measures, including:
· exploring new sources
· minimising leakage and
· encouraging water efficiency
The Government welcomes the steps taken by Folkestone and Dover Water Services in this direction and urges it to continue to do more.
Mr Morley added:
"Using water efficiently and sensibly is a matter for us all.
We must work with water companies, regulators and customer representatives to tackle the long-term challenge of water saving in the south east of England.
The Government recognises that water metering can encourage people to use water more wisely - and is also the fairest way to pay for water, based as it is on how much is used".
Water companies' powers to set charges by water meter are conferred by law. Until 2000 water companies had the power to meter anyone they chose.
In 2000 Government legislation (the Water Industry Act 1999) introduced two elements of household customer choice:
· the right to opt for a free meter and
· the right to remain on an unmeasured basis of charging in their current homes while using water for normal household purposes
Water companies have kept the power to set charges by meter for:
· non-household properties (which are nearly all metered)
· any property where metering is the established charging method
· new homes
· homes on change of occupancy and
· homes where water is used for some purposes, for example automatic sprinkler systems or swimming pools
Regulations (the Water Industry (Prescribed Conditions) Regulations 1999) also provided that water companies could make a case to the Secretary of State to have their areas designated "areas of water scarcity" where they would be permitted to meter any property, setting aside in such areas household customers' right to remain on an unmeasured basis of charging in their current homes while using water for normal household purposes.
These regulations allowing companies to apply to the Secretary of State to be designated an area of water scarcity, came into force on 1 April 2000.
The first, and to date the only, application using these powers was made by Folkestone and Dover Water Services in July 2005.
Before reaching a decision Defra consulted Ofwat (the Office of Water Services), the Environment Agency and groups representative of customers in the area. The Minister of State has announced that the company will be designated an area of water scarcity from 1 April 2006 until 31 March 2015.
Metering, alongside other measures, does generally encourage people to save water. The actual figure will vary greatly depending on individual circumstances and the structure of tariffs.
In this case Folkestone and Dover Water Services estimate that the properties they meter in the area will use 12.5% less water and Ofwat estimate that there might be 10% savings. 26% of homes in England and Wales are metered, and the figure is rising, at just over 2% a year.
Last October, the Government set up the Water Saving Group to look at the medium and long term challenges of water use and part of this work involves looking at the contribution metering can make to managing water demand.
The government says that it is for other companies with long term water supply concerns to consider making their own applications for water scarcity status and that each application will be judged on a case by case basis.
Further information
Defra Water Resources website
Application
Folkestone and Dover Water Services
Ofwat: The present statutory position concerning areas of water scarcity
Vulnerable groups scheme
Water Saving Group
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