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Last Updated: Tuesday, 5 February 2008, 16:53 GMT
Home size to decide water bills
Water tap
Thames says the new system will lead to lower water bills
Water bills will be determined by the size of customers' homes under a new billing system from Thames Water.

Under the plan, 38,000 households without a water meter will be placed in one of three bands based on the number of bedrooms at the property.

Thames said the system would better reflect the amount of water households use and result in lower bills.

It said 24,000 one or two bedroom homes would see their bills drop to 200 or 217 respectively from 245.

However, 11,500 homes with three or more bedrooms would see their bills increase to 266 from 245.

'Fairer charges'

The new system only applies to households that had requested a meter, but lived in properties where it was not practical to fit one.

Thames Water said the changes will affect about 1% of its 3.2 million customers.

"We wanted to make our charges fairer for those customers who wanted to pay for what they used, but couldn't have a meter fitted," said Mike Tempest, customer services director for Thames Water.

If they can't have a meter fitted it's only right that set charges should reflect that
Consumer Council for Water

The Consumer Council for Water welcomed the change.

"Clearly people living in smaller flats are likely to have comparatively small usage.

"If they can't have a meter fitted it's only right that set charges should reflect that," a spokesperson said.

Other water companies around the UK offer similar schemes for customers who can't have a meter installed.

The next rise in water bills for householders in England and Wales will come into effect from April this year.

Rising bills

Regulator Ofwat is currently assessing water companies' proposed price increases, which are expected to be announced in the next couple of weeks.

Ofwat controls the prices charged by water companies in England and Wales. The average price rise must be no more than the limit set by Ofwat plus inflation.

However there are no such regulatory limits on gas and electricity prices, which are linked to prices charged on the wholesale market.

In recent months, households have seen their bills rise in line with wholesale prices.

Regulator Ofgem says wholesale gas prices have increased by 66% in the last 12 months and wholesale electricity prices have risen 64%.

Most recently, Scottish Power said gas bills for its customers would rise by 15% and electricity by 14% on average. British Gas - the UK's biggest power provider - increased gas and electricity prices by 15%.

Npower raised its electricity prices by 12.7% and gas by 17.2%. EDF Energy also put up its electricity tariffs by 7.9% and gas bills by 12.9%.

Consumer watchdog Energywatch argues the gas and electricity market is not competitive enough and consumers are losing out.

It recently called on the Competition Commission to investigate.

CHANGES TO THAMES WATER BILLS

Band Bedrooms 2007/08 2008/09
1 Studio/ one 245 200
2 Two 245 217
3 Three or more 245 266



SEE ALSO
Scottish Power prices up by 15%
01 Feb 08 |  Business
Energy price rises 'unjustified'
26 Jan 08 |  Business
Thames Water hails leak progress
26 Nov 07 |  Business
Action over water contamination
26 Sep 07 |  England
Thames Water in 1bn leaks plan
29 Jun 07 |  Business
United Utilities faces 8.5m fine
18 Apr 07 |  Business
Water and sewage bills up by 7%
28 Feb 07 |  Business

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