Could Your Water Bill Go Up in a Drought? What Ofwat Has Actually Proposed, and Why a Meter Matters

Reports in August said water companies in England and Wales could be allowed to raise prices during droughts. The documents behind those reports say something narrower. Ofwat, the water regulator, has proposed two clarifications to its charging rules, due to take effect from 1 April 2027. It says they introduce no new household charges. Water UK, the industry body, says no company is planning to charge more in a drought.

None of the Ofwat documents behind this summer’s reports (the June consultation, the 19 August blog and the 1 October notice) proposes a “water scarcity charge” or prices that rise with a drought. What they do propose, and what it could mean for a household bill, is set out below.

Can a water bill go up in the middle of a drought?

No. Ofwat’s blog of 19 August, written by Emma Kelso, its Senior Director of Markets and Charging, says water companies must set and publish their charges before the charging year begins and fix them for the following 12 months, as the Water Industry Act requires. “There is no mechanism for a company to raise prices mid-year in response to a drought or a spike in demand,” it says.

The blog adds that charges must reflect long-run costs. Droughts are short-term events, so on Ofwat’s reading their short-term costs fall outside what a company’s charges are allowed to reflect.

What Ofwat has actually proposed

The proposal was put out in a statutory consultation that opened on 18 June 2026 and closed on 30 July 2026. It would amend two sets of rules: the Wholesale Charging Rules, which cover the charges behind business customers’ bills, and the Charges Scheme Rules, which cover the charges schemes each company publishes for household customers. Ofwat proposed the same three amendments to both:

• A new defined term, “Supply-Demand Balance”: the difference between the water a company has available from its sources and the demand for it from homes, businesses and leakage.
• Long-run costs would include scarcity. The rule that charging structures must reflect long-run costs would go on to name “the costs associated with meeting the Supply-Demand Balance and/or addressing water scarcity”.
• Larger and smaller users could be charged differently to save water. The current rule bases differences between charges for larger and smaller users on cost differences, such as use of the network, peak demand or service levels. The proposed wording would add a second permitted basis: “incentives to promote greater water efficiency and the associated environmental and wider societal benefits”.

The consultation document says Ofwat does not think the current rules stop companies structuring charges to encourage efficiency, but that some stakeholders felt constrained by them. It calls this “a small change”.

Why households were brought in

The work began with business customers. Ofwat’s blog says around 2,000 large business users in England and Wales account for more than 40% of business water consumption, and that these users have historically had discounted charges, which Ofwat was concerned might send the wrong signal on water efficiency. Five companies have already started to phase those discounts out.

Ofwat proposed the same wording for the household rules to keep the two sets aligned. The consultation says leaving them different would risk uncertainty over whether household charges should treat long-run costs differently, and that “several companies are already running or planning charging trials that encourage water efficiency”. Ofwat’s blog says this household change “appears to be what triggered recent press coverage”, and adds: “this consultation does not introduce any new household charges, and there are no new plans for household charging.”

Where the process stands

A statutory consultation is the last formal step before Ofwat issues revised rules. After it closes, Ofwat must wait 28 days, during which the Secretary of State (for English companies) or the Welsh Minister (for Welsh companies) may direct it not to issue them.

In its information notice of 1 October, Ofwat said it would “shortly” publish its conclusions and issue the amended rules alongside them, to take effect from April 2027. It expects companies to consider how the changes affect their charges for 2027-28 and to report any changes to household and wholesale charges that follow, including how those changes reflect water scarcity or promote efficiency. The same notice says companies’ 2027-28 charges schemes should be published no later than 1 February 2027. A company’s charges scheme is where any change to its household tariffs would appear.

Charging trials already running, some with higher summer prices

Nothing in the proposed rule change creates seasonal pricing. It already exists in trials that Ofwat has encouraged since 2022. Ofwat’s charging trials page (last updated 14 August 2026) lists these among them:

The seasonal prices are higher in summer every year, not only when there is a drought, and like any other charge they are set in advance. Anglian Water estimates that two in every three customers would be no worse off, or marginally better off, on its seasonal tariffs than on its standard charge. Ofwat says all water companies planned in their 2025-30 business plans to trial new charging structures by 2030.

What the industry and the consumer body say

Water UK, in a statement of 17 August, says no water company has suggested raising the cost of water in droughts, and that none of the companies’ proposed trials up to 2030 contains such a plan. It describes three protections: companies cannot collect more money in total, so if some customers pay more, others must pay less; vulnerable customers, such as those using extra water for medical needs, are excluded or otherwise protected; and taking part is voluntary.

CCW, the Consumer Council for Water, says on its trials page that it supports the trials. It also says plainly that some individual customers could pay more than before while others pay less, that companies must consult CCW on each scheme, and that CCW makes sure customers in vulnerable circumstances are protected or excluded. In a blog of 23 July, CCW’s Chief Executive Mike Keil wrote that CCW is keen to see time-of-day tariffs tested alongside other trials, noting that they would need a smart meter. A search of CCW’s website for “surge pricing” returned no results when Water Pages checked.

Why a meter matters

How a household is charged depends first on whether it has a meter. Ofwat’s trials page sets out the current position:

• Unmetered homes pay a fixed amount, usually a small standing charge plus an amount based on the property’s rateable value or an assessment of expected use. The bill does not depend on how much water is used.
• Metered homes pay a standing charge plus a price per litre, which is the same whatever the amount used and whenever it is used.
• Time-of-day tariffs rely on a smart meter that monitors use through the day, as CCW’s Chief Executive notes. More broadly, Ofwat says most future charging approaches depend on smart meters. Ofwat and Water UK both put the rollout at ten million smart meters by the end of the decade, with most homes not having one for some time.

Ofwat’s blog says any changes from existing trials are unlikely before 2030. Whether a meter would lower a particular household’s bill today is a separate question, covered on the is a water meter cheaper page.

Read at source on 9 October 2026: Ofwat’s “Statutory consultation on changing our Wholesale Charging Rules and Charges Scheme Rules to promote greater water efficiency” (June 2026) and its consultation page on consult.ofwat.gov.uk (opened 18 June, closed 30 July 2026); Ofwat’s blog “Why water companies can’t ‘surge price’ during a drought” by Emma Kelso (19 August 2026); Ofwat’s information notice IN 26/04, “Expectations, assurance and information requirements for water company charges for 2027-28” (1 October 2026), sections 2.1 and 2.2; Ofwat’s “Charging trials” page (last updated 14 August 2026); Water UK’s “No drought surge pricing – here’s what’s actually happening” (17 August 2026); and CCW’s “Trialling different household charges” page and Chief Executive blog “Heatwaves, hosepipe bans and peak demand” (23 July 2026). On 9 October 2026 Ofwat had not published its conclusions or the amended rules; the wording above is the wording it proposed. Water Pages is an independent information service, not a government body or a water company.