Water firms have been encouraged to be more "creative" in how they charge customers to help them cut bills and save supplies.
Under new Ofwat rules, Affinity Water, which supplies households across south-east England, will carry out a trial where it charges around 1,500 pre-selected households a cheaper rate for using a lower amount – or "block" – of water, and progressively higher prices for using larger volumes.
The firm said it expects at least two out of three homes in the trial, which begins later this year, to pay less for their water than they do currently.
Ofwat's announcement comes as households in England and Wales see the largest increase to their water bills in almost 20 years from April when they rise to an average of £448 a year.
In a separate statement, United Utilities Group PLC (LSE:UU.) said it expected revenue in the financial year that ends on Friday to have lower revenue than previously expected, while underlying net finance expense is set to widen.
The Warrington, England-based water works said revenue is anticipated to be about 1% lower than previous guidance. In November, the company said it expected financial 2023 revenue to be around 1% lower than £1.86bn a year prior. It explained that the main reason for the revenue decline is lower consumption.
The firm said it expects underlying net finance expense to be around £10mln higher than its previous guidance and about £175mln higher than in financial 2022.
Elsewhere, Thames Water was told by the Environment Agency it also needed to be more creative, holding fire on its “water recycling” plan to take water from the River Thames and replace it with treated sewage, as well as its proposal to aid droughts in the south-east of England by taking 155mln litres of water a day from the River Severn in the west.
The company, which claimed the south-east was one of its driest regions and that London gets less rain than Rome, Istanbul and Sydney, was told it needs to do more to fix the 630m litres of water leaking from its pipes a day.