Water – the forgotten utility

Martin Needham, head of commercial at Everflow Water, looks at why businesses aren’t choosing to shop around in the water industry like they are in the energy sector

The water industry was deregulated in 2017 – the biggest change to the sector in nearly three decades.

However, while the idea behind it was to increase competition in the market, in the same way as gas and electricity before it, many consumers still aren’t taking advantage of switching.

In its 2019-20 State of The Market Report, the water regulator, Ofwat, found that just under eight per cent of eligible customers were active in the last 12 months, although this rose to 16 per cent of larger SMEs and up to 26 per cent of those firms with more than 250 employees.

Limited switching

Much of this may well be a result of how difficult it has traditionally been to switch; following deregulation, quotations could take a week to produce, billing software had to be manually updated with data, and brokers were unable to manage the complete customer journey in one place, all of which took time, cost money and allowed for human error.

So, while switching is commonplace when it comes to other utilities, it’s still rare among water customers. Much of this is because brokers often don’t focus on the water market, as commission is too low and the process is too labour-intensive – see above.

At Everflow, the majority of our business comes through brokers, so we’ve taken an innovative approach to the broker relationship, by treating them as we would any customer – by making their lives easier.

This was one of the rationales behind the creation of our Eclipse software; to develop a simple, easy-to-use tool that saves time and effort for brokers and, in turn, benefits end customers.

Because while switching is the right thing for the customer – even if they don’t save thousands of pounds, they can still fix their costs and receive a service that works better for their particular set-up – it hasn’t always been the right thing for brokers.  

In fact, it could be argued that water is too cheap at present, which is why there are little cost savings to be had and therefore little appetite to find a better deal. If the price rises, would that drive switching and also encourage customers to reduce their consumption?

Net Zero

Which brings us on to our next point – reducing water usage across the board. In the UK, six per cent of our carbon emissions can be attributed to water use.

Water, while on the face of it being a renewable resource, is not carbon-neutral – far from it. Greenhouse gas emissions are produced every time we use water in any way, whether through heating, treating or transporting it.

So it stands to reason that the less water you use, the greater the impact on net zero.

At Everflow, we take water efficiency seriously.

We’ve developed a strategy and action plan that will help water wholesalers to reduce the amount of water they need to abstract from the environment to meet our customers’ needs.

Our work in water efficiency also includes measures to reduce the amount of water entering the wastewater network, to help make this infrastructure more resilient.

If we all do what we can to reduce the amount of wastewater entering the system in the first place, then so much the better, which is why we offer all our SME customers practical guides to water efficiency.

Water usage and charging

Water efficiency still isn’t talked about as much as gas and electric, and part of the reason for this is that people still don’t know how much they’re using or, if they do, they can’t put it into context.

Put simply, if customers don’t know how they’re using their water, they can’t control – or curb – it.

And that’s because the data just isn’t there; as an open market, water is still in its infancy, so much of the data held by wholesalers is out of date.

That’s why water audits and Smart Meters are of vital importance, to make sure customers know what they’re using and how to reduce it, as well as ensuring they’re paying the right amount.

At Everflow, we are working closely with industry bodies and the regulator to make smart metering more accessible and affordable for all to help drive water efficiency across the market.

It’s so important for customers to have information about their usual usage throughout the day, rather than just a monthly or six-monthly meter read, as is standard.

Only then will they be able to save on their water bills by changing or modifying inefficient appliances, or alerting them to something unusual, such as a leak.

As water retailers, we need to empower our customers to take charge of their water usage, and this can only happen if they’re fully aware of it – and their options.

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