Some of our tariffs are changing this year. Below are some FAQs which we hope will answer your questions, but if they don’t you can contact us directly in the usual way.
What changes are happening?
We are phasing out our SoLow tariff. Customers currently on this tariff will gradually have their charges aligned with our Standard tariff over the next five years.
We have also introduced a new tariff called LITE for customers with little disposable income who are struggling to pay. Some SoLow be eligible for this tariff.
These changes are about making our charges fair for all of our customers and it follows consultation about fairness and affordability with 50,000 customers over the past two years as we developed our Business Plan for 2015-2020.
Why is this happening?
In short, SoLow customers receive a subsidy on their bill and that subsidy is paid for by other customers. The subsidy amounted to every non-SoLow customer paying an £7 extra per year to fund the preferential SoLow rate.
At the time we introduced SoLow, as we embarked upon a widespread metering programme, it was appropriate to provide preferential rates for customers who were switching to metering and had low consumption. All SoLow customers have benefitted from their time on the tariff as they’ve been paying less than the standard rate for their water services. However, 80% of customers now have meters and are equally water efficient as those on SoLow. Yet, only a small percentage are benefitting from the SoLow incentive.
We have to ensure fairness for all and hence the need to phase out SoLow.
Recent analysis of the data also showed the SoLow tariff was on average benefiting smaller households rather than water efficiency households. The result was that while some people were benefitting, others were losing out despite their best efforts to use less water; larger families for instance.
These two factors combined meant that offering the preferential rate from the SoLow tariff was unfair to the majority of our customers and was no longer sustainable as a tariff.
It was a decision into which we put much thought and consideration, and that’s why we have consulted with Consumer Council for Water throughout, and have been at pains to make the changes gradual.
What will change on my bill?
You will notice a standing charge on your 2015/16 bill. However, you’ll also notice a reduction in the amount you pay for each cubic metre of water you use, which will help offset any rise.
How much will my bill change by?
Your bill depends on your individual water consumption. If you don’t know what your bill is please get in touch and we will be happy to talk you through it.
Is water efficiency still a priority?
Yes, absolutely. Water efficiency is still really important to us and we remain committed to our Love Every Drop our strategy.
We have actually enhanced our water efficiency programme recently and now every customer can get a free water audit in the home carried out by an approved plumber, and free water saving devices for the home, again fitted for free by an approved plumber. This is in addition to free water meters, discounted water butts and water-saving garden packs – all of which to help people manage their water usage and cut their bills.
The reason to remove SoLow is about being fair to all our customers. As more and more households have switched over to using water meters, they too have become water efficient. So much so that the per capita average consumption on the SoLow tariff is the same as customers on the Standard tariff. This means it’s no longer fair to offer a preferential rate for the minority of customers on SoLow.
We will always encourage water efficiency and continue to invest in education programmes for schools too.
What is a standing charge? Why is this being added to my bill?
A standing charge is like the phone line rental you pay to your telephone provider. It’s an annual charge that contributes to the retail costs of supplying water and to the provision of surface water and highway drainage wastewater services, which in general do not relate to water usage.
What is the volumetric charge?
The volumetric charge is the rate you pay for the water you use. It’s calculated in cubic meters of water used. To give you an idea, you use around 3 cubic meters of water just to flush the toilet once a day for a year.
What you’ll notice is that the volumetric charge on the Standard tariff is actually lower than on SoLow. This means, even though you will be paying a standing charge on the Standard tariff, the lower charge for the water you use will help to offset any rise in charges overall. If you are very water efficient, this will still keep the bill low. Some SoLow customers may even benefit from moving onto the Standard tariff.
What is average consumption for SoLow customers?
The average consumption for customers on SoLow is around 45 cubic metres per year.
Are you able to change your tariffs like this?
Yes, and we have been at pains to make sure the change from SoLow to Standard tariff is as manageable as possible. This is why we’re phasing the changes over a minimum of six years, having listened to customer feedback.
I’m worried. I won’t be able to afford the new bill, what can you do?
If you are worried about your bill there may be other ways we can help. We could arrange a home water efficiency audit to see if there is anyway you can reduce your usage further. Please get in touch on 0800 169 3630 if you’re interested in this.
We have also introduced a new tariff which is specially designed for people who are struggling to pay with little disposable income. This is means-assessed independently by the Citizen’s Advice Bureau so you will need to go through an application.
If you want to know more about the LITE tariff, click here.
Is there a different low consumption tariff now?
We will not be offering a low consumption tariff from 1 April 2015. We believe meters are the fairest way to charge people for the water they use and to give you control in managing and keeping your bill as low as possible.
Depending on your circumstances there may be other tariffs available. For example our Aquacare tariff is for customers who use more water because of a medical condition and are in receipt of benefits. We are also introducing a new tariff for customers with low incomes who are struggling to pay their bills. If you want to know more about this, click here.
What do I need to do now?
You don’t need to do anything. There will be no change to the way you receive or pay your bill, and we’ll manage the gradual phasing out of the SoLow tariff over the next five years so you will still be benefitting from a subsidy during this time.
Why did you announce bills are going down when mine is not?
To provide a picture of what’s happening to bills we have to quote averages. Average bills are going down by 7 per cent.
Your bill is individual and based on many different circumstances. It’s worth knowing though that the average bill for metered customers is £371 per year. The average bill for non-metered customers is £402 per year.
The average SoLow bill in 2014/15 was £210 per year. For 2015/16 the average bill will be £216, representing an increase of £6 per year.
How much of my bill goes to shareholders?
Based on the average bill of £371, customers pay £1.10 per day for water and sewerage services – this works out far less less than the price of a litre of bottled water in the supermarket.
Only 6p of that £1.10 is profit. This is what we set out in our business plan for the next five years to 2020. Over 50,000 of you helped to shape that plan in our biggest customer consultation ever and 90 per cent said they were satisfied with the plan we submitted.
Does any other company offer SoLow?
No other water company offers a tariff like SoLow.