Business Water Rates

Did business water rates increase in 2023?

Yes, business water rates went up on the first of April 2023 with an average impact of 14.4%.

The main factors driving the business water price rise were:

1. Inflationary business water rates increase

During the last year, the cost of operating the water infrastructure has increased significantly. The water network uses vast quantities of electricity to pump water across the country, and the wholesale cost of energy soared in 2023.

Underlying cost increases will impact businesses and households as wholesale rates increase. Water UK reports an average increase of 7.5% in wholesale water rates.

2. Increase in retail business water rates

Most British businesses pay default water rates capped by the regulator Ofwat.
Ofwat has reassessed its default price cap calculation, resulting in a 30% increase in the retail rates charged by business water suppliers. The change will, on average, increase overall water bills by 6.4% before inflation.

This figure is a national average for businesses, but there were significant region-by-region differences. Here’s our complete guide to the business water price rise to find the increase in your region.

How much can I save by switching to new business water rates?

Businesses can now save up to 20% of overall water costs by switching away from out-of-contract water rates. The amount your business can save depends on several key factors:

Country – The Scottish business water market has been deregulated longer than the English market, and savings available to businesses are much higher. However, the savings available for English companies increase each year and are now significant.

Wholesale region – The exact wholesale and default rates for water vary from region to region depending on which water company owns and maintains the water network.

Your supply needs – The size of your property, the amount of water it uses and the size of your water meter all impact business water rates.

Use our business water rates comparison tool today to determine how much your business can save in the open water market.

How are business water rates calculated?

Business water rates are paid by any property using the following services:

• Using potable water from the mains connections
• Disposing of wastewater into the sewers
• Disposing of trade effluent into the sewers
• The drainage of rainwater from your property
• The drainage of rainwater from the road outside your property

How you pay for these services depends on where your property is located. However, all business water suppliers use a standard set of charges. Here’s our guide to these standard charges:

Potable water standing charge

Also sometimes known as a metering charge, the potable water standing charge is a fixed daily charge that will be invoiced to your business, regardless of whether any water is used. The charge is applied to all properties to maintain the external pipes and pumping systems that supply water to properties across the region.

The size of the potable water standing charge depends on your business’s region and the size of the clean water pipe that connects to your property.

Potable water metered rates

The potable water rates depend on the amount of clean water supplied to your business property. Simply put, the more water your business uses, the more you will be charged.

The water meter at your property will measure the volume of clean water that passes through the pipe into your property. Your business water supplier will take regular readings from the water meter so that they can calculate how much to bill you.

On your business water bill, the volume of water used by your business is multiplied by a volumetric rate. The volumetric rate is the charge for each meter cubed of water supplied.

Wastewater standing charges

Wastewater is any water that leaves your property through the sewerage pipes.

The standing wastewater charge is another fixed daily charge levied to all properties regardless of whether the property produces any wastewater. The charge pays for the maintenance of the sewage system your property uses.

Wastewater metered rates

Like the clean water volumetric charge, businesses also pay for every cubic meter of wastewater flowing into the sewers.

Most water suppliers assume that all clean water supplied to your business premise eventually ends up in the wastewater system. The water company, therefore, uses the meter readings on the potable water pipes to determine the wastewater charges.

If your business uses a lot of water in its operations, it may mean that significantly fewer water returns to the sewers. If this is the case on your water bill, your supplier should apply a “return to sewerage” factor to reduce the volumetric wastewater rates.

If this isn’t happening, we recommend that your business conduct a water audit to see if you can reclaim historical overcharging from your supplier.

Surface water drainage rates

Businesses pay for removing rainwater that lands within the property’s boundary and ends up in the drainage system. Being charged for rainwater may seem unreasonable, but maintaining the drainage system is essential to avoid flooding and is an important role of the water network.

The way water suppliers approach charging for surface water drainage varies significantly and is inherently judgemental. Broadly, the charge depends on the area enclosed by your property; the larger the property, the higher the drainage charge.

If your business has a high surface water drainage charge, we recommend conducting a water audit to ensure you are fairly billed for drainage. Water audits often identify problems with the surface water drainage that allows reclaims from suppliers for historical overcharging.

Highways drainage rates

Rainwater landing on public roads and footpaths also gets funnelled into the drainage system. Water suppliers charge highway drainage rates to cover the costs of maintaining the highway drainage network.

Everyone uses public roads, but the government chooses to pay for the drainage system maintenance through water bills. To keep this fair, a water supplier will charge an equal amount to each property in its region.

If a property is not connected to the sewers, it should not be charged a highway drainage charge.

Foul sewage and trade effluent

Trade effluent is any liquid waste other than surface water and domestic sewage discharged by a business. An example is waste products from food production. The vast majority of companies do not produce trade effluent and will therefore not be charged for this.

Trade effluent charges are highly complex and dependent upon the nature of the effluent. Our comprehensive guide to trade effluent helps explain the subject.

Miscellaneous business water rates

Businesses can face a number of miscellaneous additional charges from their water network provider. The main categories of charge are as follows:

• Assessment of business water rates – You can request that your wholesaler reviews your current water rates for accuracy with a site visit. Your regional water wholesaler will look to cover the costs of this assessment.
• Disconnection charges – If you request that your property be disconnected from the water network, or your supplier disconnects your business due to non-payment of bills, they will charge for the required work.
• Reconnection charges – Equally, when you request for your business to be reconnected to the water network, your wholesaler will charge for the physical act of reconnecting your supply to the water network.
• Meter installation, repair or replacement charges – A water wholesaler will look to pass on costs associated with physical work requested regarding the water meter at your business premises.
• Smart water meter charges – Some water suppliers offer smart water meters as a separately charged add-on that gives you a real-time measurement of water consumption.

How can businesses reduce their water bills?

Broadly speaking, there are two options for reducing water bills. The first is to find the most competitive water rates so your charge per cubic meter is as low as possible. The second way is to simply use reduce the amount of water your business uses.

Here are some specific ideas to reduce your business water bill:

Conduct a water audit

The first step in reducing water bills is to conduct a water audit to understand how much water your business consumes and where it gets used. A water audit will identify leaks, wastage, and inefficiencies and help your business to make improvements.

Fix leaks

Leaks are one of the most common causes of water wastage in businesses. Fixing leaks can significantly reduce water bills and save money. Companies can hire a plumber to identify and fix leaks or install a leak detection system.

Install water-efficient devices

Water-efficient devices such as low-flow toilets, faucets, and showerheads can significantly reduce water consumption. These devices use less water than traditional ones without sacrificing performance.

Reusing water

Businesses can collect and reuse rainwater for watering plants, cleaning, and flushing toilets. Alternatively, a greywater system strategically reuses wastewater from appliances like washing machines. Both can significantly reduce the amount of water the business uses and save money on water bills.

Implement water management systems

Water management systems can help companies to monitor and control their water usage. These systems can detect leaks, measure usage, and identify waste areas.

Educate employees

Employees play an important role in reducing water consumption. Educating employees on the importance of water conservation and providing them with tips on conserving water can help reduce your business’s water bills.

Upgrade to water-efficient appliances

Replacing your old appliances, such as dishwashers and washing machines, with modern, efficient alternatives will save your business money on business electricity rates and water bills.

Monitor and measure water usage

Monitoring and measuring water usage can help businesses identify where water is being used and where it can be saved. Businesses can use smart water meters or sub-meters to measure water usage and identify waste areas.

Implement a water-saving policy

A water-saving policy can help businesses set targets and goals for reducing water consumption. A water-saving policy can include employee guidelines, targets for reducing water consumption, and incentives for achieving targets.

Comparing business water rates

By comparing business water suppliers you can compare your current business water rates to alternatives offered in the open water market. A simple switch to a fixed-rate tariff can save your business thousands on water rates.

How do water rates work if I don’t have a water meter?

Most commercial properties have a water meter that measures the volume of mains potable water consumed over time.

A minority of properties don’t have a water meter, making it necessary for the business water supplier to estimate how much water is being used by a property. There are two different ways business water suppliers calculate business water rates without a meter:

Unmeasured business water rates – In an unmeasured tariff, the Rateable Value of a property is used instead of the volume of water consumed to calculate volumetric water charges.

Assessed business water rates – In an assessed tariff, the water consumption is estimated by your business water supplier instead of being measured. The consumption estimate is made based on the size of your property and what it is being used for.

Do businesses pay water rates?

Yes, businesses will pay water rates when they have any property connected to British water infrastructure. That can be any of the following (and typically all of them):

• Potable water pipes coming into the property
• Sewage pipes going away from the property
• Rainwater drains around your property.

The business water rates your business pays depend on your region. See below for an example of a typical business water rates:

Business water rates example

Business water rates are confusing, so let’s work through an example of how they are calculated. Let’s take the example of a small office in Blackpool using 100 cubic meters of water each year (about the same as a small household).

From 1 April 2023, the regional default tariff business rates are calculated as follows:

Example: Annual business water rates for a single small office.

Water standing water charge – £78.72 (Based upon the standard water meter size of 15mm)

Volumetric water charge – £190.82, calculated by multiplying:

• Water consumed – 100 cubic meters (as measured by the water meter)
• Volumetric charge – £1.9082 per cubic meter (default tariff volumetric rate)

Wastewater standing charge – £52.58

Wastewater volumetric charge – £135.07, calculated by multiplying:

• Wastewater returned – 100 cubic meters (Using a 100% return to sewerage allowance)
• Volumetric charge – £1.3507 per cubic meter (default tariff volumetric rate)

Surface water drainage – £98.51 (Based upon the size of a small office)

Highwater drainage charge – £42.22 (Based upon the size of a small office)

Total annual business water rates – £597.92

*The example above used property within the United Utilities wholesale area on the default regional tariff. How business water rates are charged depends on your property’s wholesale region.

Check out our business water rates calculator for an interactive demonstration of the above.

What is Rateable Value (RV)?

Rateable Value is one way that business water suppliers calculate unmeasured water rates. The primary use of Rateable Value is to determine the business rates that each commercial property will need to pay to the local council.

The rateable value can also be used to determine volumetric water and wastewater charges where a property does not have a water meter. In this case, water and wastewater will be charged at a specific unit price per £ rateable value.

Each wholesaler annually publishes how the Rateable Value determines the unmeasured water and wastewater rates.

Business water rates units of measurements

The business water rates a property pays depend upon the following measured inputs that will be used to calculate the amount due in on your water bill:

Cubic meter (m³) – A measure of the volume of water consumed by a property, as measured by a water meter.
RSA (%) – The ratio used to calculate the volume of wastewater disposed of based upon the volume of clean water consumed. The RSA is usually between 90 and 100%.
Surface area (m²) – The area that a business property encompasses, a measure used to calculate the surface drainage charge.
Meter size (mm) – The width of the clean water pipe entering your water meter. Used to assess standing water charges.

Business water rates glossary

Water tariff – The scheme used to calculate the standing and volumetric water rates based on the size of the water meter and the volume of water used.

Wastewater tariff – The scheme used to calculate the standing and volumetric wastewater rates based on the size of the water meter, the volume of water used and the return to sewerage allowance.

Highways drainage tariff – The scheme used to calculate the highways drainage charge for all properties in a region.

Surface drainage tariff – The scheme used to calculate the surface drainage charge for properties by estimating the area encompassed by a property.

Return to sewerage allowance – A ratio used by business water suppliers and wholesalers to estimate the amount of water returned to the sewerage system based upon the amount of potable water used by a property.

Unmeasured water tariff – A water tariff that estimates water consumption where no water meter is installed at a property.

SPID number – A unique identifier applied to each water and wastewater supply point that records the meter size, meter reads, water tariffs, and other information required to calculate business water rates accurately.

Banded charges – Where volumetric business water rates depend on the annual consumption used at a property. These are used to apply lower business water rates to high consumption properties.

Volumetric charges – Water rates that depend on the volume of water consumption at a property. Volumetric charges are quoted per cubic meter of water supplied or wastewater removed from a property.

Wholesale scheme of charges – A document published annually by each regional water and wastewater wholesaler sets out how wholesaler water rates and tariffs are calculated.

Default tariff scheme of charges – A document published annually by business water suppliers setting out how out-of-contract business water rates are calculated.

Maximum Daily Demand Charge – An annual charge levied by a business water supplier to guarantee that a specified peak volume of water will always be available from the mains supply.

Cubic meter – A unit of volume of water used in business water rates. A cubic meter of water is equivalent to 1,000 litres.

Assessed charges – Where a business water supplier uses an estimate of annual consumption where there is no water meter at a commercial property.

Business water rates data

In this article, we’ve done our best to publish business water rates in a digestible format. The tables have been prepared by extracting publicly available water rate data.

Here’s an index of where to find your business water rates.

Wholesale business water rates 2023/24

• Scottish Water
• Affinity Water
• Anglian Water
• Bournemouth Water
• Bristol Water
• Northumbria Water
• Portsmouth Water
• SES Water
• Severn Trent
• Southern Water
• South East Water
• South Staffs Water
• South West Water
• Thames Water
• United Utilities
• Wessex Water
• Yorkshire Water

Regional default business water rates 2023/24

• Castle Water (Thames, Affinity, Portsmouth and South East)
• Business Stream (Scotland, Yorkshire and Southern)
• Wave (Northumbria, Anglian, Essex & Suffolk)
• Source for Business (Bournemouth, Cambridge, South Staffs, South West)
• Water 2 Business (Bristol and Wessex)
• SES Business Water (Sutton and East Surrey)
• Water Plus (Severn Trent, United Utilities)