Water Companies have very different prices by region

Updated with response from Wessex water CEO

This is a simple story about a monopoly that seems poorly regulated by the government. Regional water prices to domestic households vary by 70% between areas.

We discovered this because we own a self-catering holiday home in Swanage. We also own our home in Teddington and have been trying to work out why our water bills in Swanage are so high compared to Teddington. I have discovered that Wessex Water charges a 70% higher price than Thames Water.

It transpires that whilst Thames Water charge us £2.57 per m3, Wessex water charge £4.38 per m3. This is 70% more than we are charged in Teddington. We challenged Wessex Water about this and they said yes that is correct and there is nothing we can do about it. They are a monopoly and they can charge what they like.

They tried to deny that they were a monopoly when on the phone, but they confirmed that we have no choice and have to buy water from them. In my book that is a monopoly.

Wessex Water also operates a complex pricing charge with standing charge plus a rate. Thames Water just charge a rate.

I am wondering if you think this kind of discrepancy and charge is justified? It seems to me that Dorset residents are being heavily overcharged for water by a local monopoly that was established by government.

I have written to the press to alert residents of Purbeck to this situation, I have contacted the company, the local MP, Ofwat, and the Competition and Markets Authority.

Response from Wessex Water CEO Colin Skellett –

which is very thorough and very helpful. Interestingly, as customers we have always found Wessex to be very helpful.

Dear Mr Radford

Thank you for your email about the difference between charges for your properties in Wessex Water and Thames Water. You are right that the charges are significantly different, and I understand your concerns. The variations reflect differences in geography, the level of investment required, efficiency and service levels.

Let me start by assuring you that Wessex Water is efficient – it is consistently rated by our regulators as one of the most efficient water and sewerage companies. We also provide high standards of customer service and environmental performance. For example, it is now 40 years since Wessex Water had to replace any restrictions on customer use of water and we had no customers affected by the “beast from the east” storm earlier this year.

Our charges are higher because we serve a largely rural area for water supply. The more economic urban areas within the Wessex Water region are served by Bristol Water and Bournemouth Water companies. Thames Water has the benefit of serving a largely very dense, urban population.

On a per customer basis, compared to Thames Water, we have to operate and maintain more than double the length of water main, seven times the number of service reservoirs and water treatment works and five times the number of water pumping stations. Because of the density of population, Thames Water treatment works are on average nine times larger than ours, with resulting lower unit costs.

Quality regulations over the last 20 years are particularly focused on the improving standards at coastal treatment works and the environment at sites of particular ecological value. We have a large coastline and many sites of ecological value, which means that we have had to invest more per customer than Thames Water, which is more urban and has no coastline.

We continually seek to deliver services more efficiently and to keep bills to a minimum. We have recently submitted our business plan for 2020-2025 which, despite record levels of investment, will result in charges decreasing in real terms up to 2025.

I hope this explanation is helpful.

Yours sincerely
Colin Skellett
Group Chief Executive

My reaction and response

Dear Colin

Thank you for taking the time to explain and to do it with so much care and detail.

So my summary is that it costs more to distribute and supply water in rural areas and because we have regional water companies that cost is taken by each water company and therefore passed on to their customers. There is no national adjustment, people in rural areas pay more for their water. It is a political decision based on the way the industry is organised.

I will raise this with the MP’s concerned, but not as an accusation that Wessex Water is a rip-off. More that water is very expensive and the cost is unevenly distributed.

I can confirm we have always had good service from Wessex and that Thames is less good and less responsive when we have asked for help.

FYI suggestions about your service – not a complaint
Our only significant experience with Wessex was when we had a very large water bill (£995 in 6 months) and in response, you delayed seeking payment and you came out to test our meters and installation in general, to see if we were paying for someone else’s water. In the end, we concluded we had some problems with a water softener and toilet cisterns and maybe had suffered at the hands of some extravagant guests in our house. Our usage has halved since we corrected these issues.

Your engineer helped us as much as he was allowed to by your protocols. and we checked all the external fixtures and checked that the house had no leaks by testing the meter in different ways. He did a series of checks to make sure we were not paying for the neighbour’s water. Under pressure from me, he gave some suggestions as to where we might have had leaks in the house and what might do. But I ran up against the usual thing with suppliers whereby the supplier is reluctant to help beyond the limits of their legal responsibility.

So my suggestion is that when the engineer comes out, if there is any way they can be encouraged to advise on how to get problems fixed inside the house as well as outside, then that would complete the service. I realise that the installation in the house is a customers responsibility to pay for.

The other big difference would be to make it much easier to see how much water I am using. 6 months is a long time in which we can waste a lot of water and run up a large bill. If we had been alerted earlier then we would have acted earlier. Trying to read the meter in the street on a regular basis to check usage is unrealistic. Plus the numbers on the meter mean nothing to me, so even if I looked then I would have no idea what was happening.

If you could fix that then I think customers would really feel like you were trying to help. It might also conserve water. And if it really costs £900 a year to supply the water to my house then this is now a large bill that we need to pay attention to.