Water Audits

Unchartered waters for businesses as deregulation looms

So what is deregulation and how will this regulatory change affect my business?

The water retail market in England and Wales is expected to go through a period of significant change as the industry counts down to April 2017’s full deregulation of the water industry for non-domestic consumers. This is a regulatory change that will impact all businesses, enabling them to switch their clean and waste water services from this date or remain with their existing providers. Once deregulation comes into effect, businesses can actively seek better deals. By switching or renegotiating prices, businesses could inadvertently lose out on a potential windfall which could see them recover significant sums of money.

The UK Government has decided to open the industry up to competition in an attempt to stimulate innovation, improve service provision and drive a sustainable approach to our scarce water resource. It is also seeking to provide customers with a greater degree of trust and confidence in their suppliers.

As with the energy sector, increased competition can only mean improved value for customers, greater choice and better prices. Unlike the energy industry though the water industry has been slower to adopt newer technologies and bills haven’t accurately detailed how they are made up. So the industry is under pressure from the outset to embrace all these issues and competition too.

For the majority of consumers, a typical water bill details meter charges, clean water costs, sanitisation, surface water and highway drainage (SWHD), and provides a sufficient amount of billing information for invoices to be cleared for payment. There are many factors which contribute to each billing element and many businesses have been overpaying for their water utility services due to these complex pricing structures. It is likely therefore there may be discrepancies between the services an organisation uses and the services the organisation is charged for.

In the light of this it would be wise to demonstrate a degree of caution and consider the options carefully before simply jumping ship to a new water supplier or a new water contract with an existing provider before April 2017. This is especially true as part of the new regulations to be introduced will mean once an organisation switches to a new provider, or new contract, they lose the right to recoup any overpayments which may have been made to the provider during the previous six years. Furthermore, once deregulation comes into effect, businesses will not be able to claim for any retrospective cost recovery.

So where should you start? Not with the switch we’d suggest…

The initial step before any action is taken should be, in our view, to gain a complete understanding of how water is used within an organisation. Once identified, the organisation can track back to identify any duplicate charges or wrongly applied fees over the previous six years.

Identifying leaks, for example, can contribute significantly to any retrospective claim. Often leaks can go unnoticed for years, adding to a business’ water costs. Through detailed analysis and benchmarking, an organisation should be able to identify if there is a leak, how much water has been lost over the six year period and submit a leakage allowance claim with the incumbent provider.

For the customer, the time for change is fast approaching and if an organisation doesn’t have suitable resource to audit their water accounts, then all is not lost, they should consult an experienced water management agency which specialises in cost savings and retrospective claims.

Utilitrack has partnered with Water Management Solutions Limited a business with 20 years’ experience within the water sector. It provides a simple but professional process for cost reduction and retrospective recovery for businesses across the UK.