Balancing trade effluent volume and strength charges
Charges for removing and treating trade effluent depend both on the volume of effluent that is removed and the strength of the wastewater that is treated. A larger volume of effluent costs more to move, but greater contamination within the wastewater means that it costs more to treat.
Water and sewerage companies can vary the way that trade effluent costs are calculated. They do this by varying the relative weight of volume and strength charges in the Mogden formula . This is acceptable as long as weights are justified by the actual costs of receiving and conveying effluent, compared with the actual costs of treatment.
In recent years, some companies have increased their charges for reception and conveyance, and decreased their charges for biological treatment and for treating and disposing of sludge. For example, five companies have split the secondary treatment charge into two elements (B and Bv) to reflect the load- and volume-related costs associated with secondary treatment.
We think that this refinement has enabled the companies to achieve a better balance between the different treatment elements in the current Mogden formula. However, we require robust information from the companies about how charges are calculated to make sure that they are not engaging in anti-competitive pricing for treatment services.
