Seasonal water tarrifs

WATER is set to cost more during the summer following the introduction of a controversial seasonal tariff, it emerged yesterday.

I find myself a little confused here.

Something costs more at times of higher demand….clearly and obviously sensible.

However, there\’s another little thought at the back of my brain. Levelling out the cycle….we\’ve got lots of water in winter and not very much in summer. So we do want a system to store the first and deliver it during the second. And, umm, well, yes, I see the point of price systems here but….isn\’t managing that cycle what we\’re already paying the water companies to do?

6 thoughts on “Seasonal water tarrifs”

  1. One of the few advantages to living where I live is that my water comes from one of the largest artificial lakes in Europe, and is unmetered. (Northumbrian Water are, generally, excellent at what they do here.) For the rest of the country to have similar benefits would require either similar holes elsewhere (unpopular, as Tim A points out) or a “national grid” which was mooted some time ago but never built.

  2. This is of course a nice example of how, if unfettered, speculation could help. For investors, seeing that water prices would rise in summer, would stockpile water in winter, and then release it in summer, thus raising one price and lowering the other.

    This would be profitable as long as the storage costs of water were less than the price differential, plus the interest rate.

    However it a) founders on Tim’s point and b) I guess quite a few others (is it expensive to treat reservoir water so its drinkable?)

  3. “is it expensive to treat reservoir water so its drinkable?”

    That’s what they do now. All my water comes from Kielder, via the treatment works in town.

  4. Oh sure, but I’m not sure how much it would take out of your profits if you were (and could) speculate in water, so to speak.

  5. So Much For Subtlety

    Tim Almond – “To be fair to the water companies, they’d love to build more reservoirs, but get repeatedly blocked by NIMBYs.”

    No they wouldn’t. Most dams have a reasonable level of usage. The problem comes with a period of low rainfall every ten years or so. You have to build a dam that is only used every ten years or so. The water companies do not want to do that. But then there are lesser shortages every five year or so. They don’t want to build one for that either. So instead we have water restrictions – rationing by annoyance really. In fact we tend to use a lot more water in summer every year and they don’t want to build a dam for that either.

    Why would they? Dams are expensive. That last ten percent of storage is expensive but rarely used. Much better to limit use than add to the supply.

    This is because water companies are regional monopolies. If we separated storage from supply – so someone owned the dams and someone else the pipes – we might well pay for the extra water. But we don’t. So they don’t build that last ten percent. Just as they are doing f**k all about the loss of 33% of the water that enters the Thames Water pipe system.

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