Phased water charges

Depending on your consumption. BBC Linky.
Behemoth, you're our man in the water industry, can we have your views please?

Behemoth

I'm a bit wobbly, so, later.

orangepippin

On the surface this sounds like a good thing ... but monopolies generally like to make their prices as complicated as possible, so whilst it might be good today for the average consumer, that might not be the case tomorrow. As the article says, they would not clarify what "essential" usage covered but you can be sure their definition and your definition will not be the same in the longer term.

toggle

essential usage for a big family is going to be a lot more than a single person.

Treacodactyl

The general idea sounds reasonable to me, better than the way energy companies charge less the more you use. Rolling Eyes

I wonder if the idea could also be applied to the council tax?

orangepippin

Your comment about council tax is interesting. Our local authorities, just like our water companies, are regional monopoly service providers. That's why their prices just go up and up - above the rate of inflation.

Behemoth

orangepippin wrote:

... but monopolies generally like to make their prices as complicated as possible.

Far from it, monopolies have no need for complicated tariff structures. THey are expensive to admiister and unnecessary. The complex tariffs are used by competitive companies supplying the same product (telecoms, gas, TV...) to give 'choice' where the only differntiator is price and service level. The cynic would also say that confusion marketing is also a way of denying the consumer perfect market knowledge and a way of distorting the market e.g. mobile telephones.

Behemoth

A bit of background....

Water companies were established as licensed monoplies in their designated area of operation. The license imposes certain terms and conditions on the companies in terms of what they have to do to supply water and sewerage charges, how they can charge for them and how prices are set.

A fundamental part of this regime has been the requirement that companies can not discriminate for or against any individual or group of customers.

In practice everybody in the region has to pay on the same basis and cross subsidies are not allowed. The only real differntiation has been between metered and unmetered, but even there there is a requirment that the average customer, whether on a meter on not should be paying the same amount.

The reason for this clause was to prevent customer in rural areas being charged more than urban, those without bank accounts shouldn't be penalised fo the greater expense of collecting their money through payment books/post offices etc, basically costs are spread across the whole customer base not on individual circumstances. This is of course a certain amount of cross subsidy but is not discriminatory.

In the past water companies have argued that is is their job to provide water and serwerage services and to charge for them. As private companies who can not discriminate issues of ability to pay and benefits were not in their sphere of responsibility. THe obvious comparison is with the fuel utilities where they are included in benfit calculations and there is the payment for pensioners. Water has not been included as high a priority in calculating benfits as other fuels.

THis position has recently been challenged by the Regulator who wants the companies to come up with inovative methods of charging that help custmers who have problems paying thier bills and giving customers incentives reduce their water consumption. However the 'no discrimination clause still stands'.

Rising block tariffs, where you pay more as you use more are rare in the UK, but not impossible. However thewse have been based on the costs of providing the service and the increased capacity required to meet additional demand only, not to subsidise other customers.

It's taken me an hour to get this far due to continual interuption...

....so briefly, as long as companies get their revenue to operate and improve services and are not breaking the law in doing it, I doubt there's an issue, as long as the system is straight forward and is not a complicate benefits system.

The real question is do customer mind subsidising others?
Will the subsidy of 'large users' have any real impact on the bills of the ordinary/low users.

Right I give up, will try to be more coherent later.

	Downsizer Forum Index -> Energy Efficiency & Construction
Page 1 of 1

You must set the ad_network_ads_377.txt file to be writable (check file name as well).