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There are substantial losses to leakage. On the Discover Water website you can compare Cambridge Water Company with others. As of 2018/2019, Cambridge was equal second best for leakage per km of mains and not bad for leakage per property:
OFWAT puts a lot of pressure on water companies to reduce leaks but it is expensive - and also causes disruption when it means digging up the roads. Water leaks can be triggered by ground movement due to dry, wet or cold weather. A thaw after freezing weather often triggers leaks in customer pipes too - this all counts towards the companies leakage target even though we are responsible for our own water pipes. (Speaking from experience, the water company can fix your leak for you but they may charge for this.)
The Environment Agency manages licences to abstract water, both from underground aquifers and from rivers (small amounts do not need licences). Cambridge Water has not exceeded its licence - but arguably the limits are too high. In July 2019 the Environment Agency said:
We have already changed 71 abstraction licences relating to 15 chalk streams across England. These return 16 million cubic metres per year of water back to chalk streams and remove the risk of another 8 million cubic metres per year being taken. This is equivalent to the average annual domestic water use of approximately 200,000 people, the approximate population of Oxford or Preston. We will continue to review conditions on abstraction licences where there has been a negative impact on the environment and where they may be at risk in the foreseeable future.
This is a good question. Their current water resources management plan does not include new sources except for reinstating some existing boreholes that were not used because the water requires additional treatment. They considered abstraction from above ground sources, mainly from the River Ouse but there are other water companies interested in increasing supply from that river. There are also options for building reservoirs to capture more winter rainfall. The expense could potentially be shared with other companies. There is a partnership looking into this: Water Resources East.
In principle, our sewage water could be treated to drinking quality and recycled directly. However, currently our sewage is handled by Anglian Water. There is some trading between the two companies but this is mainly Cambridge Water exporting to Anglian Water. Anglian Water is also hard pushed to maintain supplies for its region.
If you have a water meter, your water bill tells you how much water you are using. If you have paper bills, it is on the second page (illustrated). The units are cubic meters and the bill covers 6 months. The average consumption for people on a meter is 133 litres/person/day, which would be about 24 cubic meters in 6 months. However, with reasonable care and an efficient toilet you should be able to do much better e.g. 18 cubic meters.
If you do not have a water meter - ask for one. There are no charges for this. Cambridge Water has a switch back guarantee so that you can change your mind if you decide you would prefer the unmetered bill after all.
Even if you do have a meter it is hard to know how much is for showers, toilet, taps etc - try Nicola's calculator.
If you have a water meter then saving water saves money too. If you don't have a water meter you can probably get one for free - just ask the company. Currently, water costs about 2.5p/litre (including sewerage charges as well as supply). This may not sound much but it adds up over the year; If changing your toilet saves 4 litres/flush, and your household uses it 10 times per day, you would save £36/year.
There are lots of ways to reduce your water consumption. Some cost nothing at all (like taking shorter showers). Others require some investment. Waterwise is one of the best places for advice.
Anything you can do to reduce mains water consumption at any time (not just in a drought) will reduce pressure on supplies. You can harvest rainwater in water butts for the garden only, or you can install a larger tank (usually underground) with a filter and a pump to supply water for your toilets and washing machine. This can be expensive but experience shows it can be very effective at reducing consumption - even with dual flush toilets they are usually a substantial part of our water consumption (see Nicola's calculator). There are quite a few homes in OpenEcoHomes with rainwater harvesting installed.