Business water rates: Is deregulation working?
The water market opened for business on 1 April. Two months in, we look at the changes introduced. How have they affected business water rates for water and sewerage services?
Prior to April, water suppliers generally operated as both wholesaler and retailer. Deregulation meant that the water suppliers split their business into two companies: the wholesale arm and the retail arm. Today, the wholesale arm continues to maintain and service the network of pipes. Meanwhile the retail arm buys water from the wholesale arm and sells this onto businesses like yours.
Wholesale business water rates
This is where the new water market is much more transparent. Historically, most water suppliers factored their service charges and profit into the unit charges for water and sewerage use, or perhaps the standing charge. If this continued then there would now be a multitude of different business water rates for each region.
Thankfully, water retailers are now being as transparent as possible.
All water retailers pass on wholesale business water rates to the customer with no mark up. Great news for businesses, as this forms a large proportion of their water bill. The wholesale price will still increase every April as it always has. With all water retailers charging businesses the wholesale cost, businesses know they cannot be overcharged for this,
Savings on water service charges
The second element of business water rates charged on your new water bill is the service (or retail) charge. This covers billing, meter reading, customer service, and the water retailers profit margin.
The water service charge will vary considerably between retailers. Most water retailers will clearly show this as a separate charge to the wholesale cost of water on your bill. It is this part of the new business water rates that you should be checking and comparing between different retailers.
To date, we have saved businesses with a single site, up to 43% off their water services charge. We can do this through our working relationships with the water retailers. There are further savings too, for businesses with multiple sites. For multi-site businesses the savings are generally increased for each additional site.
Retailers are also bundling other options, such as a water audit or smart metering. A water audit will check your bills for the last 6 years to see if you have been overcharged. This can then be claimed back from the previous supplier. It is too early to see the success rate of this, so we will report back in a few months with the results.
All in all, the new business water market is much more transparent which is a real benefit to businesses.
Perfect Clarity can help businesses save money on their energy and water contracts. Call 020 3372 6517 for more information.