How is the water market changing?

From 1st April 2017 more than 1 million businesses in England will have the freedom to choose the Retailer for their water and wastewater retail services.

Thanks to market deregulation, you’ll be able to contract your water services in a similar way to how you already negotiate your gas and electricity costs.  The local Wholesaler, who provides the water and takes away your wastewater, will remain the same but the key difference is that you will be able to choose which Retailer will handle your meter reading, billing and customer services.

Why is deregulation good?

  • You can negotiate a better deal
  • You’ll be able to switch if you don’t like the service you receive
  • If you have multiple locations across the country you’ll be able to select one supplier for all the sites

A further significant change is that a range of new licensed Retailers will now be able to join the market and these new-entrants will be competing against the existing, established Wholesalers who are also setting up as Retailers.

You are probably hoping you’ll be able to make significant savings on your water costs, like those available when the energy market deregulated.  Sadly, this won’t be the case as Retailers will only be in a position to compete on the retail element of your costs, the larger wholesale cost will remain the same.  It is expected that the discounts each provider will offer are unlikely to vary significantly and will probably be in the region of a 2% to 3% saving.  As an example, if you spend £150,000 each year, the maximum you are likely to save is between £3,000 & £4,500 per annum.

 

How can I drive more benefit from the changes?

Take the time to think about what you really want from your Retailer. If customer service is important to you then choose one with a proven track record or that places this at the very heart of what they do.

It is also important to consider what non-cost benefits would make a positive impact on your business.

For example –

  • Would online account management make coordinating your supplies and invoices easier?
  • Would you find it easier to have a dedicated account manager?
  • What payment options does your company prefer?

 

What should I do now?

After the market opens there will be many enquiries made to the Retailers.  Until they have proven how well they handle the influx, how their customer service teams are able to respond to the new contracting processes and how robust their new billing systems are, we suggest waiting for a few months and making a choice once there is strong evidence of good performance.

In the meantime, we believe the best plan of action is to make sure that your current billing is in order. This can be a ‘health check’ on the charges, consumption or metering.  When you are ready to go out to the market, your water portfolio will be in order and you will know exactly how much you will be able to save.

 

Can Indigo Swan help?

Yes, of course.  Get in touch and, just like with your energy supplies, we’ll provide the right tools and knowhow to help you make the best decision about the future of your water contracts.

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