The answer to this is investment — but the water companies seem strangely reluctant to pay for future benefits and instead like to ensure their shareholders get a decent bung now.
The water companies love investing. For that increases their regulated capital base. And the authorities allow them to make a regulated return on that capital base. Which leads to the joyous idea that the authorities stop the water companies from investing, because if they do invest then they’ll be allowed to put their prices up.
They are prevented, by law, from investing…..
But does repairing old pipes count as increasing their capital base? Probably not, so they don’t have much incentive to stop leaks then do they?
‘water-giants-are-dumping-sewage-so-why-cant-we-when-the-urge-takes-you-just-head-for-the-river’
Well, you can. It’s just as legal for you as for the companies.
“Well, you can. It’s just as legal for you as for the companies.”
No it isn’t. If a domestic dwelling started sticking its untreated septic tank outflow into a river the Environment Agency would soon be hauling the owner up in court.
And where do the water companies get the money to do this future investment? From their sharholders, dummy! Who expact to be paid for the loan of their money. If you loaned somebody your lawn mower you’d expect a) something in return, even if just a warm fuzzy feeling, and b) the lawnmower back.
‘… so they don’t have much incentive to stop leaks then do they?‘
The water that leaks is treated and therefore is an expense to the water company; more has to be treated to replace it. Only that treated water that reaches the consumer can be sold and provide revenue to contribute to costs and profit. That’s the incentive.
This is true of any produced good.
Jim – great vid you posted yesterday. I didn’t want to respond light-heartedly below C J Nerd’s deeply personal contribution so can I enquire now whether the monster in question had the full endorsement of comrade Monbiov and whether the brave design team received the order of the Golden Sickle of the Soviet Union for meeting the stringent emission targets of the five-year-plan?
@TMB: Yes, somehow I don’t think that Kirovets tractor was running on adblue, or had any emissions systems in place. As they say in farming, no smoke no poke!
For those still insisting that the water companies aren’t investing in the water / sewage systems this article where even the squealing socialists of the Scottisch Nasties admit govt control of water is worse is illuminating:
https://theferret.scot/scotland-behind-england-sewage-leaks/
Jim: As they say in farming, no smoke no poke!
Fair enough although amusingly I seem to recall Rocco Siffredi telling me that in his line it was the other way round…
“The water that leaks is treated and therefore is an expense to the water company; more has to be treated to replace it. Only that treated water that reaches the consumer can be sold and provide revenue to contribute to costs and profit. That’s the incentive.”
The marginal cost of treating another X million gallons is very low, most of the cost of treatment is fixed plant. So if the variable costs of the extra water treatment is less than the cost of repairing all the leaks then they make more profit by leaving the leaks alone and just treating more water to compensate for the losses.
Jim: …then they make more profit by leaving the leaks alone…
Yes – and the relative loss in treating the leaks v not treating them indicates that this is the socially-optimum outcome, so we should be happy to see it come to pass.
@ Jim
My local water company obviously does regard the cost of collecting and purifying extra water as significant because it spends lots of money on campaigns to get us to use less water, telling me to turn off the tap while I am cleaning my teeth, to take a shower instead of a bath, to only part fill the kettle when I want a cup of coffee … It also keeps telling us that we are responsible for leaks within the boudaries of our property. That’s not just during real water shortages when the government imposes a hosepipe ban, but all the time.
The worst offenders in dumping sewage are, of course, the state-owned Scottish Water and the Welsh-government-sponsored not-for-profit Welsh Water
Part fill the kettle? That only works for saving watt-hours unless you chuck out the boiled water & refill with fresh after every boil. Does anyone do that?
That only works for saving watt-hours
And the time spent waiting for the bloody kettle to boil…
“My local water company obviously does regard the cost of collecting and purifying extra water as significant because it spends lots of money on campaigns to get us to use less water, telling me to turn off the tap while I am cleaning my teeth, to take a shower instead of a bath, to only part fill the kettle when I want a cup of coffee … It also keeps telling us that we are responsible for leaks within the boudaries of our property. That’s not just during real water shortages when the government imposes a hosepipe ban, but all the time.”
I suspect a lot of that ‘save water’ guff is government mandated. Both for greenery reasons, and to provide ‘advice’ to people on low incomes. Its arse covering – if people fall behind on their water bills the water co can say ‘But we gave all this advice on how to save water!’ while taking them to court. The electric companies do exactly the same. Its just PR really.
And the bit about leaks in your property being your responsibility is so you don’t have a leg to stand on when they send you a big bill because you’ve had a leak on your side of the meter.
@ Tractor Gent
I periodically flush out the kettle when it gets too chalky, so it’s plausible that some other customers rinse the kettle after every use.
It is incredibly difficult to stop leaks. We are not talking about broken water mains producing floods of water. The vast majority of leaks are from old underground pipes and would probably be better described as seeps. The only way to deal with these is by complete relining or replacement of the water mains which is expensive aand very disruptive