Opening of the water market in England

You may be forgiven for not marking that date in your calendar. What started a few years ago with great fanfare has somewhat dampened in recent times. The idea? To introduce a competitive market comparable to the Electric and Gas that emerged over 25 years ago. The issue, however, is that water is not a tradable commodity in the traditional sense and supplier margins are dictate by Ofwat every 5 years. Suppliers are quite rightly timid when it comes to promoting any potential like for like savings that market competition could induce. In fact, some large water companies have decided not to enter the market at all. *Thames Water for example, who had already been operating in Scotland, has decided to withdraw completely from the commercial sector.

In Scotland, de-regulation has been in existence since 2008 and, at the time, this was a world first. The market as its stands was supposed to be the shining light forOfwat to aspire to, with new start-ups entering the industry driving innovation and reduction in water consumption. However, in truth, the first few years saw little switching and only small savings. It is anticipated that this same slow start will be seen until the next first price review takes effect in 2020, where larger savings will hopefully be realised for end users.
So what's in it for me?
There is one major benefit, which is the ability to consolidate billing for multiple sites, regardless of area, with one supplier. This will have obvious administrative benefits and many suppliers will also offer value added services such as on-site water inspections to identify leaks. Where there are ageing sites or high water costs attached to certain sites within a portfolio, these bundled services should identify efficiency savings. Overall it is unlikely end users will achieve dramatic annual savings just by switching to one supplier, not before 2020 anyway!
Despite this we recommend you start to develop a water strategy with the objective of consolidating your estate with one supplier and reducing your water footprint. Not only will you benefit from improved efficiencies and value added services, but you'll be ideally placed to take your well-managed portfolio straight to market in 2020 when prices should be a lot more favourable.
*Information sourced from Thames Water websites:

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