(Bloomberg) -- Homes in Surrey with sprawling gardens and private swimming pools may have to pay more for their water usage under a first-of-its-kind plan set to be tested by their local supplier.
From Oct 1. Affinity Water Ltd, which supplies parts of southeast England, will trial charging some customers on a sliding scale, with the highest users paying the most. The utility has so far billed a standard rate for each liter used.
The test run starts a day before water and sewerage companies publish investment plans, laying out how they aim to repair aging networks, deal with sewage spills and tackle growing drought and flooding caused by climate change.
Read more: Thames Water Faces £100 Million Penalty for Missed Targets
The biggest challenge for many companies will be finding a way to fund their upgrades. Water payments in the UK have historically been low, but that has led to the degradation of infrastructure and in turn public anger at poor service. Consumers now face bigger bills as companies seek to repair leaky pipes. But increasing charges during a cost of living crisis could prove to be challenging.
Thames Water Ltd. has also been considering progressive charging, which would help vulnerable customers and encourage high users to cut down. In July, Cathryn Ross, its interim chief executive officer, said the idea was being considered as one way to improve infrastructure.
The first phase of Affinity Water’s test billing system will cover 1,500 customers in the town of Stevenage. If successful, it could be extended and expanded across the region, which includes parts of London and affluent areas like Surrey, known for its large gardens and pools. Consumers will get their first 30,000 liters (7,925.2 gallons) of water for free. The next 215,000 liters of water will cost £1.51 for every 1,000 liters of water used. That will rise to £4 after £245,000 liters have been used.
Read more: UK Water Bills Set to Jump as Companies Target 75% Spending Hike
Affinity Water expects that two-thirds of customers will see their water bills decrease if their usage is unchanged. The company has been working with the regulator Ofwat and the Consumer Council for Water on its new plans.
“The aim of our tariff trial is to discover if a different way of charging makes water bills more affordable for our customers,” James Tipler, Affinity Water’s head of financial support & service delivery said in a company statement. “And if it better encourages customers to save water.”
(Adds detail on Thames Water’s similar plans in paragraph five. An earlier version of the story incorrectly mentioned golf courses)
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