In 2017, water deregulation will occur of the non-domestic water market in England; following the example Scotland set in 2008. The Energy Network will be at the forefront of the biggest shake up of the water industry in a generation, offering water audits in a bid to help your business purchase water for the most competitive prices.
How does competition in the water industry work?
Until changes are made in 2017, the water industry will remain a regulated regionally dominated business, as it has been since 1989. This means that unless your business is over a certain size, you can’t pick your water supplier, as you might an energy company, based on their price: you’re provided with water based on your location.
From 2017, this will all change. Whilst the wholesaler of the water will be the same, the suppliers will change; it’s from these suppliers that you’ll be able to purchase water and sewage services.
In the new cycle, suppliers purchase the water and services from the wholesaler, after which they bundle them up with added-value offerings and their services, selling them on-to the customer, resulting in the customer receiving the most cost effective end result. It’s important to therefore realise that suppliers’ prices, from 2017 onwards, vary, so for your business it’s imperative to get the best possible deal as you look through what different service providers are offering.
Why is the water market deregulating?
As it stands, the regulation is that only businesses using over five million litres of water per year have the option to switch supplier; smaller businesses are bound by their region to their water supplier, meaning the price they’re paying is higher than it should be.
In 2008, Scotland became the first country in the world to have a deregulated water market; in the six years since this change, £100 million has been cut from Scottish non-domestic water users bills. Deregulation in England is estimated to deliver £200 million worth of benefits to business customers and the UK economy.
What are the benefits of deregulation?
From small to large size businesses, charities and non-profit organisations; together known as non-household customers, the deregulation will affect us all. For all these sectors, deregulation boasts huge benefits, including lower bills and better value for money, an improved level of customer service as companies do more to keep your business, and the water package you buy being tailored to your business needs. There are benefits for the environment too; a more efficient use of water means there’s reduced carbon emissions from cuts in water use.
As competition between suppliers increases, customers will be encouraged to find one that will best meets their needs; wanting an attractive deal in terms of water and sewage prices coupled with high quality customer service.
What can you be doing ahead of the changes?
Whilst changes aren’t occurring until next year, there are two things you can do to ensure you’re receiving the best deal on your water. The first is to start thinking about conducting an audit on your water consumption so that you’re in a position to take advantage of the best deals when they appear, as verified data will allow for the most effective tendering process. The second is that whilst the changes aren’t being made until next April, some of the best deals available will already have been and gone by then; being ahead of the game will mean you’re able to negotiate a better plan from your supplier.
If you’re interested in more information, and want to be ahead of the trend to ensure you benefit the most out of water deregulation, please get in touch with us so we can discuss your business’ strategy in 2017.