Water companies may be permitted to increase customer bills during droughts under proposals being examined by the regulator for England and Wales.

Ofwat’s plans would allow suppliers to reflect “water scarcity” in their charges as part of measures intended to curb consumption. The idea has been compared with surge pricing, where taxi and private-hire operators increase fares when demand is high.

The proposals emerged only days after senior political figures expressed anger at water companies and accused them of treating customers as a “blank cheque”, following approval for more than a dozen suppliers to push bills even higher.

It was revealed last Thursday that five firms – Southern Water, Thames Water, Severn Trent, Wessex Water and South East Water – could increase charges beyond their original plans before the end of the decade, enabling billions of pounds in additional spending on repairs and infrastructure.

The surge-pricing concept follows the 30 July conclusion of Ofwat’s consultation on revisions to wholesale charging rules. The regulator is expected to publish its final decision soon.

Public frustration with water companies has intensified in recent years. Bills have risen while sewage pollution has continued in rivers and coastal waters, and companies have increased executive pay and distributed millions of pounds in shareholder dividends.

During an unusually hot and dry summer, almost three-quarters of England and the whole of Wales were formally declared to be in drought. Suppliers were also criticised for failing to prevent water escaping through leaking pipes, with campaigners arguing that these losses greatly exceed the savings achievable through a nationwide hosepipe ban.

An Ofwat spokesperson said: “Using water efficiently benefits everyone, including businesses. The options we are taking forward would help water companies give greater consideration to scarcity and efficiency when setting charges, while supporting more innovation in tariffs.”

Several suppliers have tested alternative charging models in recent years, with the aim of making bills more affordable and potentially lowering demand.

South West Water, which serves about 1.8 million customers across south-west England, including Devon and Cornwall, is testing a “rising block tariff”. Under the trial, roughly 500 households pay a lower rate for an initial amount, or “block”, of water, followed by gradually higher prices as usage increases.

Based on the company’s assessment, 90% of participating customers would receive lower bills through the trial.

Anglian Water, which serves 7 million customers in eastern England, the driest part of the UK, and South West Water are also testing seasonal tariffs that charge customers more for water consumed during summer than during winter.

There are currently no government proposals to introduce surge pricing for household water bills across the country.

A government spokesperson said: “Water companies are testing different charging systems which, as promised, must make bills fairer and more affordable while promoting more efficient water use.”

They added: “We have already protected funding allocated to new infrastructure so it can only be used to address existing problems. We will also pursue fundamental reform of the water industry so it serves the public and keeps bills as low as possible.”

Andy White, a senior social policy lead at the Consumer Council for Water, a government-sponsored organisation representing customers, said suppliers were right to investigate new tariff models that could manage demand and give households greater control over their bills.

He said: “Any new system must be fair and safeguard customers who are already finding it difficult to cope with rising water charges. None of the trials currently under way is intended to produce extra income for companies, and many are designed so that most customers pay less overall.”

White also said suppliers should provide consumers with smart-meter information, helping them better understand how and when they use water.

A spokesperson for Water UK, the industry trade body, said companies were working to reduce leakage, adding: “We must also consider whether water bills could be used to reward people for saving water. Options might include removing standing charges or offering wider discounts to customers who reduce their consumption.”