What Businesses Need to Know About Water Deregulation

Upon the water industry becoming deregulated, businesses were able to choose the retailer that they buy their water supply from. Local monopoly companies still continue to source, treat and pipe water to your business premises and to carry away your wastewater for treatment and disposal. However, local water companies no longer bill business customers directly.

Who Is The Wholesaler?

The “wholesaler” provides the “engineering” elements of business water services: sourcing, treating and piping water, and collecting, treating and disposing of wastewater. Wholesalers are obliged to treat all retailers equally so they can compete fairly.

Who Is The Retailer?

The “retailer” is the company that sells water, wastewater, and drainage services to your business. They provide billing, are responsible for any leakages on your business premises, and will be the first point of contact for any customer service issues. Deregulation has effectively opened up the water market and retailers are open to competition. New retailers are permitted to enter the water sector and provide new sources of water or sewage treatment services.

Does It Apply To My Business?

Deregulation applies to all non-household water customers in England, that is, a business, charity, public sector, or not-for-profitt organization of any size or type. Business water deals and tariffs can be viewed online at the link.

N.B. Water deregulation does not apply to Northern Ireland and Wales, therefore, sites or businesses in these locations are not eligible for new market opportunities. The Scottish water market was deregulated back in 2008.

What Are The Options Available To My Business?

There are several options available to you:

  • Do nothing and stay with your old water company.
  • Secure a better deal with your current retailer.
  • Select a new retailer
  • Supply yourself

What Are The Benefits To My Business?

  • More choice – The government believes that the presence of new entrants in the market and shopping around for retail water services will give you a better deal on your water product/ package.
  • Lower prices – Unfortunately, despite government intention to make water more affordable for businesses, it is predicted that achieving savings on your water bills will not be that straightforward. The Water Services Regulation Authority, Ofwat, still regulates the wholesale cost of water and has put a cap on the profit margins that retailers are allowed to make (currently an average of 2.5 percent margin).
  • Enhanced services – It is predicted that deregulation will produce more accurate and timely billing and for those businesses with more than one site, it will lead to efficiencies in receiving a consolidated invoice from a single retailer. Through deregulation your business is not limited to only using your local wholesaler for each site, you can choose one retailer who can manage your water supply in multiple locations and across several different wholesalers. You also have the power to be choosy about service provision and can opt for a retailer that provides the tools you require to manage your water usage effectively.