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What will water deregulation mean for businesses?

Posted by: Lauren Cox 21 Mar 17  | Current Issues |  Technology

Deregulation of the water industry in England is now just two weeks away. Hoping to follow in Scotland’s successful footsteps on the 1st April 2017, 1.2 million businesses, charities and public sector organisations will be given the opportunity to shop around and change water suppliers.

Will history repeat itself?

In 2008, Scotland became the first country worldwide to deregulate the water market for non-domestic customers, giving businesses the chance to save an estimated 15%-20% just by switching.

With an aim to take smart businesses to the next level, The Department for Environment, Food and Rural Affairs has suggested that the change could deliver in excess of £200m in benefits to customers, as well as the UK economy. 

It’s hardly surprising, then, that the water industry spent the best part of 2016 preparing. According to Ofwat, a number of water suppliers have set up new trading divisions and joint ventures following Thames Water’s agreement to sell their book of business customers to Scottish supplier Castle Water. With this revolutionary change, 18 companies have become licensed retailers, with a further four applications still pending.

In addition to this, Market Operator Services Ltd (MOSL) has been created in order to provide the IT infrastructure to enable switching to happen and with good reason. Chief Executive, Ben Jeffs, has stated that over 700 customers have already pre-switched and is expecting this number to rise ahead of the deadline at the end of this month.

So what will the freedom of water deregulation mean for businesses?

Speculation is largely positive. As part of the smart cities movement, this initiative is set to make businesses even smarter. Not only will businesses save money on their water bills, but they will become more water efficient.

Non-domestic customers can expect to see a heightened level of customer service as providers begin to up the ante. Water retailers are already actively trying to reduce customer’s water bills through water efficiency, working against the grain to keep hold of their customers and maintain competitive advantage. This won’t stop, as more and more companies saturate the market, trying to win new business through providing value for money.

We know this because it’s already been tried and tested in Scotland. While discounts were modest from the onset, they now stand at around 20-25%. Water Hub predicts that discounts across providers will start at 5%. Watch this space!

The water market deregulation will open the reserve for potential savings, especially with the opportunity for multiservice bundles. This not only makes way for combining utility bills, but for businesses who want to use one provider for multiple premises across England and Scotland and consolidate their accounts. 

With the open water deadline looming, businesses are also preparing for deregulation in a bid to secure a favourable contract with water retailers. It’s a great time for businesses to seize the opportunity, as long as they are clear on their priorities and have an understanding of their usage. It’s time to act in order to ensure that the switch will be plain sailing. 


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