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A complete guide to the business water market changes


The UK’s business water market is being opened up to competition in April 2018. But what does this mean for you?

At the moment, most businesses don’t have a choice in who provides them with water. However, under the new rules, the water market will be opened up, with different suppliers vying for your business. Many are even predicting that water will be bundled with other services, such as broadband, electricity or gas.

Why?

Regulator Ofwat believes that opening up the market will allow consumers to seek lower prices as well as encourage innovation within the industry. It has been argued that the UK water industry is living in the dark ages, with few companies allowing customers to manage bills online or via app. Additionally, Open Water believe that the changes will lead to greater water efficiency, and reduced emissions from lower usage.

The changes will see firms buying batches of water from existing providers such as Yorkshire Water, Severn Trent or Thames Water. They will then sell water onto consumers. Due to the nature of the service, it’s predicted that energy and gas suppliers may enter the market.  

United Utilities and Severn Water have reacted to the changes by teaming up to create a new business water retail company called ‘Water Plus’. However, whilst the changes are likely to see new suppliers enter the market, some suppliers have already exited, deciding instead to focus on domestic energy. In July, Thames Water announced that it will no longer serve business customers after April, and will instead transfer business customers to Castle Water.

The changes could particularly benefit multi-site businesses, who will be able to deal with a single supplier instead of multiple regional suppliers.

Theoretically, having a choice of providers should drive prices down, although Ofwat have underplayed this, stating that bills may only be reduced by an average of £8 per year.

Are you eligible?

Businesses that use over 50 megalitres litres per year have been able to switch business suppliers for some time. In Scotland, any non-household water customer can already switch suppliers. The new rules will remove the 50 megalitres threshold in England, and increase the pool of potential switchers to over 1million businesses.

Basically, if you have a business premises, and you use water, you should be able to switch.

Those businesses that use over 50 megalitres will have the option to apply for a retail water license and ‘self supply’ by buying water directly from the supplier.

Research has found that awareness of the changes among small businesses is low, with fewer than 1 in 10 aware that they will be able to switch suppliers from April. Despite this, 38% said they would be interested in switching once the market is opened up.

For more information see http://www.open-water.org.uk/

 

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