Posts Tagged ‘water tariffs’

Eight years after water deregulation was introduced in Scotland, April 2017 marks the opening of the English water market to competition. From next year businesses in England can choose their water supplier, opening up opportunities for price cuts and service improvements.

Experience from Scotland shows that savings of up to 25% may be possible, while competition should stimulate water companies to improve their service, billing systems and value added offers (eg around water efficiency). At a minimum, consolidating multiple supplies with a single provider should simplify things.

From October this year businesses will be able to give notice to their incumbent water company that they intend to switch supplier (or at least look at alternatives).

This means now’s the time to audit your water supplies, consumption and cost data to firstly ensure you’re paying the correct rates and haven’t been overcharged, and secondly to ensure you’re best placed to switch supplier next April.

For Thames Water customers change is definitely coming, after the supplier announced it would be transferring all business customers to a new supplier, Scotland-based Castle Water, and withdrawing from the commercial market. Thames will remain a domestic supplier and run the water infrastructure, but from the end of 2016 Castle will take over billing and customer service.

Do get in touch to discuss how E&CM can help.

Advertisements

Eight years after water deregulation was introduced in Scotland, April 2017 will mark the opening of the English water market to competition. From next year businesses in England can choose their water supplier, opening up opportunities for price cuts and service improvements.

Experience from Scotland shows that savings of up to 25% may be possible, while competition should stimulate water companies to improve their service, billing systems and value added offers (eg around water efficiency). At a minimum, consolidating multiple supplies with a single provider should simplify things.

From October this year businesses will be able to give notice to their incumbent water company that they intend to switch supplier (or at least look at alternatives).

In advance of that it’s worth auditing your water supplies, consumption and cost data to firstly ensure you’re paying the correct rates and haven’t been overcharged, and secondly to ensure you’re best placed to switch supplier next April.

Do get in touch to discuss how E&CM can help.

 

The Royal Assent of the Water Bill will allow English businesses a choice of water supplier for the first time from April 2017. The non-domestic market was opened up in Scotland in 2008.

The end of regional monopolies means the water industry is finally following in the footsteps of the deregulated energy market, giving commercial water users the opportunity to change supplier in the search for lower prices and improved customer service.

Business benefits

Water deregulation should encourage businesses to take more interest and control in their water consumption and costs, making it easier to identify and implement water efficiency measures.

One immediate benefit for multi-site businesses will be the opportunity to appoint a single water supplier, making water administration, billing and monitoring far easier.

Suppliers under pressure

In the meantime, suppliers have three years to convince their currently captive customers that they should stick with them post-2017, so we should, in theory, see greater emphasis on customer service and added value such as metering, efficiency and tailored services.

 

Water and sewage costs are determined by set tariff structures which most water suppliers publish on 1 April each year, with two implications:

  • you may experience increased tariffs and therefore costs for the coming year
  • 31 March is the last day on which you can claim rebates/refunds for incorrect charges for the previous year

As water and sewage charges become ever more complex the risk of tariff and billing mistakes looms ever larger. A priority in managing water costs is therefore to understand the volumes of water and sewage currently being purchased, checking these against the applicable tariffs from your water company.

This process ensures that the correct charges are being applied based on your actual usage, identifying both opportunities for cost savings in the future and refunds for any historic over-charging.

The key thing though, is to audit these tariffs before 31 March so any errors can be claimed for the previous year; if you wait any longer refunds will only go back to 1 April.

A water audit is a quick process requiring only copies of your latest water bills and can usually be done on a no refund-no fee basis.

Investment of £250 billion is required to improve the UK’s water infrastructure according to a recent report, leading to rises in water bills.

The renewal of ageing water mains, reservoirs, waste water treatment centres and even water company vehicles and IT systems are needed,  which at current rates of investment (around £5.5 billion a year) will take 50 years. In order to increase that rate of investment and ensure the water infrastructure remains fit for purpose businesses and consumers are set to see higher bills in the shorter-term.

While water users in England and Wales are currently unable to switch suppliers (unlike Scotland), the only way to minimise water costs is to:

  • check and optimise your (increasingly complex) water & sewage tariffs and make sure you’re not overpaying
  • benchmark your consumption against similar facilities to eliminate waste
  • reduce consumption through water savings technologies (eg automatic sensor taps, rain water harvesting and grey water)

A proactive approach to water management through tariff analysis, wastage elimination and the application of new technology ensures that your cost base is kept under control, freeing up cashflow and mitigating the risk of future price rises.

While water costs may not be exposed to the same price volatility as energy, this doesn’t mean that businesses cannot proactively manage their water use and costs, cutting both consumption and costs through detailed tariff and volume analysis.

An English county cricket club therefore asked Energy & Carbon Management (E&CM) to review its water charges with the aim of cutting its annual bill.

Water and sewage costs are determined by set tariff structures, precluding the opportunity for users to negotiate directly with their supplier. As these tariffs, usually published on 1 April and lasting for 12 months, are becoming increasingly complex, E&CM conducted a desktop analysis of the organisation’s historical water invoices, reviewing:

  • costs
  • volume
  • tariffs
  • trade effluent
  • surface water drainage

This analysis identified a couple of areas requiring further exploration, including an on-site inspection of the ground’s water infrastructure. This process immediately identified an annual saving of £3,773 through a potential meter reduction, an application for the Major User Tariff scheme and an application for a greater non-return to sewer allowance.

E&CM was also able to find significant potential for on-going consumption and cost reduction measures through rainwater harvesting and water recycling, providing quotations and payback periods.

Water costs may not be high up most businesses’ priority lists, but paying the incorrect tariff is money down the drain. Implementing annual checks on your water bills, coupled with on-going consumption monitoring, is a straightforward and essential way of minimising your costs, and in some instance recouping over-payments.

Although it may seem a distant memory after the drenching of last summer and the snow of winter, it was less than a year ago that Thames Water and many other water companies were imposing hosepipe bans and warning of long-term water shortages. To cope with the increasing unpredictability of our rainfall, significant (if belated) investment is being made in the UK’s water infrastructure which is feeding through to higher bills for businesses and consumers.

Unlike energy, deregulation of the water industry did not introduce competition to the water market, however, leaving regional suppliers with local monopolies over water and sewerage services. And while water costs may not be exposed to the same price volatility as energy, this doesn’t mean that business users cannot proactively manage their water use and costs, cutting both consumption and costs through detailed tariff and volume analysis.

The first step must be to ensure you’re not over-paying for your supplies. Water and sewage costs are determined by set tariff structures, precluding the opportunity for users to negotiate directly with their supplier. These tariffs, usually published on 1 April and lasting for 12 months, are becoming increasingly complex however, often composed of the following separate charges:

  • Water supply
  • Water meter standing charge
  • Foul sewerage removal costs
  • Foul sewerage standing charge
  • Rateable value or area based surface water drainage charges
  • Highway drainage charges
  • Trade effluent charges

A priority in managing your water costs is therefore to understand the volumes of water and sewerage currently being purchased, benchmarking these volumes against all the available tariffs from your water company. This process ensures that the correct charges are being applied based on your actual usage, identifying both opportunities for cost savings in the future and refunds for any historic over-charging.

As water volumes and tariff structures change this review should be conducted annually to ensure you continue to pay the correct price.

Tariff analysis also helps to build a profile of your operational water and sewerage use, identifying additional saving opportunities, often from trade effluent, and sewerage charges, as well as meter sizing. For instance, a site currently used for warehousing may previously have been home to water-intensive manufacturing producing high volumes of trade effluent and generating significant costs. The change of use to warehousing should mean that the water meter (inflow) can be reduced in size and trade effluent charges cut, bringing immediate and long-term cost reductions – but only if the new usage is assessed and reported to the water company.

Water costs may not be high up most businesses’ priority list, but paying the incorrect tariff is money down the drain. Implementing annual checks on your water bills, coupled with on-going consumption monitoring, is a straightforward and essential way of minimising your costs, and in some instance recouping over-payments.