Water deregulation one year on

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England’s non-domestic water retail market opened in April last year, giving businesses the opportunity to choose their water and wastewater retailers for the first time.

It’s the biggest competitive water market of its kind anywhere in the world, the market has experienced some teething problems and switching has been somewhat sluggish, but there is a general feeling of optimism from suppliers, regulators and third-party intermediaries like Utility Helpline.

Benefits of water deregulation:

  • More choice
  • Cheaper prices
  • Consolidated billing

Less than 5% of companies have switched

According to data from MOSL (Market Operator Services Limited), which operates the new water market, 112,155 non-domestic supply points out of a total 2.6 million estimated supply points have been switched in the last year.

This represents 4.5% of the total supply points. But the number of businesses that have switched is likely to be significantly lower because many businesses with large premises have more than one water supply point.

Concerningly, the number of switches appeared to slow down slightly in the first quarter of 2018 with 29,690 switches registered compared to 30,649 in the previous quarter.

Much of the switching has been driven by bigger businesses, switching to consolidate their bills across sites. According to MOSL data, the 4.5% of supply points that have switched account for 10.5% of the total water volume delivered to businesses in England.

But with a lot of legacy measurement systems still in place, there remains several concerns about the quality of supply data.

Water switching for SMEs

One thing that everyone agrees on is that SME owners still lack awareness about the benefits of an open water market and are not engaging with it fully.

Research from SES Business Water suggests that 59% of small businesses in England are still unaware that they can switch water suppliers.

Separate research carried out by the Consumer Council for Water (CCWater) suggests that the problem is even worse. They found that only two out of five small and medium sized businesses (38%) know that they can switch retailers.

Worryingly for CCWater, these awareness levels have not shifted compared to responses to their first wave of results in August 2017.

Tony Smith, Chief Executive of the Consumer Council for Water, said: “We want choice to work for everyone, from the smallest to the largest business, but that relies on customers having an awareness and understanding of the market.”

“All of us in the water sector need to ask ourselves are we doing enough to reach out to small businesses and help them understand why this market is worth engaging with. At present our research shows there is a lot more to do. We must not allow awareness levels to stagnate.”

Opportunities for SMEs

Bigger businesses often have more opportunities to save when they switch water suppliers, particularly because of the opportunity to consolidate billing across multiple sites and billing for water and wastewater.

MOSL claim that in the first year of deregulation, customers have shown a clean preference for sourcing water and wastewater services from the same supplier.

Small and medium-sized businesses also have the opportunity to save up to 25% on water bills by switching away from a legacy supplier.

With increased competition in the market, switching businesses are also more likely to get a better service from the client involved.

Using an experienced utility broker like Utility Helpline gives small and medium-sized businesses more opportunities to save.

At the same time as switching water suppliers, they can also switch other utilities like electricity and gas to increase savings.

We can also help you save with our utility consultancy services. Our water audit and monitoring services let you find out if you have been overcharged for water and wastewater services and help you reclaim any lost money.

To learn more about switching your water supplier or any of Utility Helpline’s services, speak to a member of the team today. Call: 0800 043 0423.