Ofwat policy on leakage, water efficiency and metering

Ofwat plans (15 pages, PDF) for setting targets on leakage and water efficiency for water undertakers in England and Wales. Some further information and consultancy reports have also been published.

The document also outlines Ofwat's approach to decisions on whether to include metering and climate change costs in expenditure allowances. Ofwat expresses surprise at claims that large-scale metering may not be economically justified, and states that it will use “wider benefits” grounds to allow metering costs to be recovered from consumers even if these costs exceed the quantifiable benefits of metering, and even if there is only “a reasonable prospect that unquantified net benefits can bridge” the gap between quantified costs and benefits.

The examples of such “wider benefits” of metering given by Ofwat are:

reducing demand will generate environmental benefits, which are likely to outweigh the environmental costs of installing and operating meters;

customers would have heated some of the water saved, so there are energy cost savings too;

it is fairer to charge customers according to how much water they use rather than according to the rateable value of their property; and

metering opens up the possibility of even more cost-reflective charges through new measured tariffs, providing greater flexibility for managing demand in the future.

Update, 20 November 2008: Ofwat announcement about targets for water undertakers to reduce consumption by households.

For further information or advice please contact Franck Latrémolière.

Filed under Ofwat, Water.

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