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Why are water bills going up again?

Why are water bills going up again?

Thursday 11 July 2024

Why are water bills going up again?

Thursday 11 July 2024


Islanders' purses are continuing to be pummelled by rising costs – with £26 expected to be added to water bills from next year.

The rise of 5.7% – which matches the current rate of inflation – equates to 7p per day and will take effect from 1 January.

It comes after a rise this year, with households paying around 12p more per day higher, equating to 10.9% or approximately £45 per year.

For all but three of the past 20 years, Jersey Water has kept its price increases at or below RPI. 

The firm said there will be no further rises before 1 January 2026.

Why the latest hike?

The firm says that next year’s charges reflect the "ongoing challenges of the economic climate" on its operating costs and the investment it is making in its infrastructure to safeguard future supplies.

"Next year, we are still anticipating a 3.9% increase in our operating costs, on top of rises in contractor costs for our capital investment programme and an overall decrease in customer demand for water," explained CEO Helier Smith.

Helier Smith Jersey Water desalination.jpg

Pictured: Chief Executive Helier Smith at the desalination plant.

"While proportionate, 2025’s tariff will also help alleviate these costs pressures and support our capital investment programme, so we continue to maintain the highest
levels of service.”

In its annual report released in December 2023, the utility company declared a pre-tax profit for the year to September of £1,165,000, compared to the previous year's like-for-like figure of £2,745,000.

Mr Smith said at the time that the company's operating costs had increased by 12.6%, rising by almost £2 million from the 2022 figure of £15.5m.

As a result of the fall in profits, the final dividend to shareholders was cut from approximately 16.5p per share in 2021/22 to 8.5p for the last financial year. The Government of Jersey is the company's majority and controlling shareholder.

Events mentioned in the report included the Grands Vaux flooding in January 2023, the response to which had cost the company an estimated £190,000.

Also referenced was the hot summer of 2022, which meant it was necessary to continue operating the desalination plant during the following autumn.

In 2022, the company said the desalination plant cost around £8,000 per day to operate.

What's on the horizon?

Jersey Water is currently drawing up its new Water Resources Management Plan – a five-year strategy due to be published early next year which will outline various ways the firm hopes to increase supplies amid increasingly extreme weather.

The previous plan warned that if no action was taken, from 2045, demand would exceed supply by 8.2 million litres a day during severe drought conditions.

Mr Smith previously said various options, including a major extension to the desalination plant, were being considered.

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