Water UK

Water meters

11/04/07

Being more aware of how much water you are using, and paying for it on that basis, is seen by most people as one of the best ways of reducing demand. In many countries the policy over many years has been to fit meters to all domestic premises, not necessarily to reduce demand but simply as a method of charging.

In the UK we have a different tradition. In England and Wales only 30% of dwellings have a meter. Most domestic customers can choose or refuse to have one fitted. This limits companies’ ability to adapt policy to specific environments, and increases the cost of metering, because it is not possible to equip all the houses in an area in one project.

In fact there is a live debate about whether, and by how much, meters do actually reduce consumption and whether compulsory metering is desirable. Research during the 1990s showed a drop of 15% in certain cases. But water is relatively cheap and metered consumers may reason that they have no special duty to limit their consumption because they are paying for the amount they use.

Compulsory metering is also controversial for social reasons. Some consumer representatives and social commentators are critical on the grounds that less well-off customers may limit their use to save money with a consequent risk to health or hygiene.

Water UK supports a company-specific approach to meters. Metering has a cost that must be assessed against benefits if metering policy is to be sustainable. National policy should be flexible enough to allow companies to pursue sustainable metering according to local circumstances.

Water scarcity status

Water legislation allows a water company to ask the government to designate an area of potential shortage as ‘water-scarce’ if it meets certain criteria. One of the advantages is that the company can then require all customers to have meters fitted. To date only Folkestone and Dover Water has obtained the designation.

The reticence of other companies in considering an application for water-scarcity status stems from worries about the reaction of customers to compulsory metering. The commitment of government, regulators and consumer representatives is important here. All these stakeholders should agree to support (and if necessary to defend) any justified application for water scarcity status by explaining clearly and publicly why it makes sense.

The government-led Water Savings Group, set up and chaired by the Environment Minister, is well-placed to encourage such a collaborative policy and is sponsoring a revision to current arrangements – see Water UK press release.

Smart meters

As the role of metering is more widely debated, the potential of so-called ‘smart meters’ is attracting more attention. Compared to conventional meters, these are better able to monitor variations in demand at different times of the day and year. They also allow a variety of different tariff structures to be used, for example charging more for very high use during peak demand periods when the availability of water may be most pressing.

Of course, such clever technology comes at a price, and smart meters cost more than their ‘dumb’ counterparts. They are also a variety of models of differing cost and technological capability available on the market. Therefore, Water UK considers that, whilst smart meters should be considered as part of a range of demand management measures, they should only be introduced on widespread basis where they can be shown to be cost-effective and contribute to more sustainable water management.

Ends

Jeanne Golay
Economic Regulation Adviser
020 7344 1808
or
Bruce Horton
Policy Adviser
020 7344 1817