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Why Yorkshire Water is rolling out its 'Best Tariff' pilot

Liz Barber, Yorkshire Water's director of finance, regulation and markets, explains the company's plans to proactively tell 100,000 of its customers how they could save money

We’ve recently been speaking to customers to find out what they think about how water companies are owned and managed and what they expect from us in terms of transparency and openness. They told us a number of interesting things, but the most striking was that the key to regaining trust was demonstrating that we were making sure they are paying as little as possible and on the best tariff for them.

Our customers also said that because there are no price comparison sites for water, they expect us, as the monopoly supplier, to be looking out for them and letting them know if they’d be better off on a meter. Around 1.1 million of our customers currently have meters, meaning that we needed to look at our customer base and do some analytics which could show us which group to target.

This analysis identified 100,000 customers who are currently billed on rateable value who could potentially save money by switching to a meter. Typically, our analysis picked up customers whose property had a high rateable value, but a low occupancy.

For example, our analysis tends to show that those who live in an older house with more bedrooms than occupants have a good chance of saving money by switching to a meter. Also, those on a high rateable value also stand a good chance of saving money by making the switch. Those that rent are also legally entitled to switch to a water meter as long as they have a minimum six-month tenancy agreement in place.

The average amount last year that our measured customers paid for their water (and sewerage) was £313.84, which is significantly less than the unmeasured average annual bill of £439. So there is real scope for customers to save money, depending of course on how water efficient they are. We already have one of the cheapest bills in the UK, which is £43 cheaper than the national average, and this pilot could bring bills down further.

We’re now starting to contact these customers to see how they respond to the offer of a meter. We know that many are put off switching for fear that they might get a nasty surprise and end up paying more because of their consumption. To ease their minds and encourage the switch, we’ll promise to keep their account under review for two years and to switch them back if it turns out that they don’t save money. In the unlikely event that they aren’t better off in the two-year period, we’ll also refund them the difference at the end of the trial.  We’ll also offer them advice on how to use less water. 

Our pilot has no strings attached to it and if a customer asks for a meter we will aim to smoothly install it as quickly as possible using our own plumbers and external plumbers, if required, to help manage demand.

If the pilot is successful, we’ll roll the principle out to all our unmetered customers as part of a “price promise” at the heart of our proposals for the next five-year period. Under this proposal, which would be an industry first, we would commit to review the accounts of all customers who do not have meters to identify those who might be better off on a metered supply.

We’re also continuing to approach to customers in financial difficulty who are finding it difficult to pay their bills, which is around one in five. By using analytic techniques, it’s now possible for us to proactively identify those customers who might be at risk of being in this position. 

We then contact them to identify what alternatives might be open to them or see if they qualify for one of our reduced social tariffs. Last year, we helped over 28,000 customers with £8 million of help to pay their bills, and this will continue this year.

We hope that this initiative will help us in our commitment to be more transparent and lead the way in the water sector building trust with customers.

Topic: Innovation
Tags: water metering , Yorkshire Water , water bills

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