Oct 20, 2017

Singapore introduce first water tariff increase in 17 years

Asia
Sophie Chapman
2 min
Singapore introduce higher tariff on water in 2017
This year the Public Utilities Board of Singapore (PUB) instituted its first tariff raise since 2000. The rise is in order...

This year the Public Utilities Board of Singapore (PUB) instituted its first tariff raise since 2000.

The rise is in order to secure the country’s future water needs, as well as managing the risk of extreme weather conditions and water scarcity propelled by climate change.

The increase was instituted to fund new investments towards NEWater and desalination sources; PUB expect the alternative source will contribute to 85% of Singapore’s future water needs by 2060.

Funding for risk assessment of extreme weather and water scarcity was also a contributing factor, with Singapore’s weather conditions expected to get more extreme in the future.

The increase in tariff is part of a long-term strategy, with rates in the city-state increasing by 30% phased over two years. The next increase is projected for 2018.

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Due to decades of investment in desalination and wastewater reuse facilities and despite being one year into the five-year election cycle, the government only implemented the rate hike this year.

“To encourage prudent usage and ensure sustainability, PUB prices water to the cost of producing it from the next available source, which is likely to be from NEWater and desalination,” reported a spokesperson from PUB.

PUB’s investment in water infrastructure is predicted to cost approximately US$4bn over the next five years.

The countries tariffs are still relatively low compared to Europe and America, however, partly due to the government’s subsidising drainage costs.

These findings were sourced from the Global Water Tariff Survey 2017, and were published in a new White Paper entitled The Global Value of Water by GWI and the Global Water Leaders Group (GWLG) in partnership with Arup.

Find out more about the Global Water Tariff Survey 2017 and The Global Value of Water here

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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