Large user tariffs for water

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Large user tariffs for water

The following alternative forms of large user tariffs are currently available in some companies' areas.

Seasonal tariffs

Seasonal tariffs comprise a volumetric rate that is higher in the summer months than in the winter months. Companies can apply seasonal tariffs if they read customers' meters at appropriate intervals – they do not need to install 'smart' meters to do this. Currently, only Bournemouth & West Hampshire Water, Mid Kent Water, Tendring Hundred Water and Severn Trent Water offer seasonal tariffs to their non-household customers.

Subscribed demand tariffs

This type of tariff provides customers with a strong incentive to manage their peak demands. Customers are required to notify companies of their likely maximum daily demand before the charging year starts.

A subscribed demand tariff usually comprises:

an annual maximum demand charge, expressed in £ per megalitre per day (£/ml/d), that is generally based on a customer's maximum daily demand (note: a megalitre is one million litres);
a usage rate - pence per cubic metre (p/m³), which is applied to the volume of water that the customer uses up to the quantity which that customer has notified as its maximum daily demand; and
a penalty rate (p/m³), which is applied to all volumes that the customer takes in excess of its notified maximum daily demand.

As each customer has to forecast its maximum daily demand at the start of the year. Customers need to talk to their supplier about likely future demand.

Anglian Water, South East Water and South Staffordshire Water currently offer subscribed demand tariffs.

Interruptible tariffs

Interruptible tariffs allow commercial customers to take the risk of occasional interruptions to supply in exchange for lower tariffs. To date, only Severn Trent Water, Yorkshire Water, Anglian Water and Wessex Water offer interruptible tariffs. Both Severn Trent Water and Yorkshire Water offer an interruptible tariff to customers who use at least 250 million litres of water a year and who are prepared to interrupt their supplies on a medium-term (24 hours) basis. Anglian Water and Wessex Water offer interruptible tariffs for customers who are prepared to accept a short-term (four hours) interruption.

Reservation charges for stand-by supplies

Customers who have access to supplies from, for example, a borehole or an on-site effluent treatment plant, may only require back-up supplies if their own supplies fail. These customers have particular cost characteristics and, as a distinct customer group, may require a dedicated suite of reservation or stand-by charges.

Companies charge for stand-by supplies by using:

a fixed standing charge (£/year) related to meter size;
a volume-related charge (p/m³) that companies apply to the volume reserved by customers over the whole year (possibly split between peak and off-peak seasons); or
a specific reservation charge (£/Ml/d) based on customers' maximum daily demands.

Currently, six companies offer standard reservation tariffs to their customers. Other companies may be willing to offer reservation tariffs by special agreement.

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