Smart meters could be used to charge water customers more during heatwaves or supply shortages as companies brace for warmer summers and more frequent droughts.
Fifteen water firms are planning to roll out pricing trials that include seasonal tariffs on water consumption, as well as higher charges during shortages.
The trials were recommended for “when water is scarce” by industry regulator Ofwat, which in April approved average bill increases of £123, or 26 per cent, for companies in England and Wales. As they are trials, the plans have not been confirmed and no water companies have announces dynamic pricing schemes as of yet.
This comes as Yorkshire Water introduced a hosepipe ban on Friday after the region experienced its driest spring in 132 years.
South East Water also announced a hosepipe ban on Friday for more than one million customers in Kent and Sussex.
The announcements were made after reservoirs across England reached their lowest June levels in a decade. The reservoirs were 76 per cent full last month, marking a drop from the 77 per cent capacity recorded during the severe drought year of 2022.
Households consume up to double the amount of water in hot weather. The average four-person family consumes 438 litres of water per day, according to Southern Water.
To cope with the rising demand, water companies such as Anglian Water have set out plans to trial seasonal tariffs that aim to “reduce discretionary water usage” in summer.
Dry cracked earth at Baitings Reservoir in Ripponden, West Yorkshire (Photo: Danny Lawson/PA Wire)Other “rising block” tariffs would charge customers more if they their water usage exceeds a certain threshold.
One such trial is being rolled out by Severn Trent, which aims to allow customers taking part to pay less for their first 5,000 litres consumed in a month, current bills for the next 5,000 and a higher rate for all usage over 10,000 litres.
Under Thames Water’s rising block trial, customers could be charged double for their water if they consume 685 litres a day.
The trials have been dovetailed with water companies’ controversial roll-out of smart meters, which can be used to track household consumption levels during certain timeframes.
The Consumer Council for Water warned firms that the current roll-out of smart meters to the public risked “damaging customer trust”, while former Conservative leader Sir Iain Duncan Smith said the devices amounted to “Big Brother spying on us”.
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A Water UK spokesperson said: “With water meters, people pay only for the water they use.
“Over the next five years, some companies are trialling ways of using meters to reduce most people’s bills, with very high users, such as those with swimming pools, making up the difference.
“Companies are not allowed to profit from these trials, which are also intended to save water.”
Earlier this week, Thames Water, which supplies millions of customers across parts of Gloucestershire, Wiltshire, Kent, Surrey, the Thames Valley and Greater London, said it may have to introduce water restrictions “unless the situation changes significantly”.
After introducing a hosepipe ban, Yorkshire Water’s director of water, Dave Kaye, warned restrictions could last until winter, adding that action was needed “now” to conserve water and protect the environment.
The water firm has placed restrictions on using hosepipes for activities such as watering the garden, cleaning cars and filling paddling pools, which it said is part of its efforts to protect supplies in the face of yet more dry weather forecast for the coming weeks.
Customers who breach the ban could face fines of up to £1,000, but the utility previously said “we hope it won’t come to that”.
Ofwat denied that smart meters were being used to monitor whether people breached hosepipe bans, as the devices could not identify how water was being consumed.
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