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Water costs slashed by 25%

The English water market is about to be deregulated; what’s in it for non-residential customers, and will deregulation encourage real competition and innovation?

The Water Act 2014 allows for the creation of a new market for English water retail and wastewater services for businesses and public sector organisations.

Some 1.2 million customers will be able to choose who supplies the water and wastewater services in the new market planned to open for business in April 2017.

What’s in it for non-residential customers? Well, for the first three years it appears not a lot in terms of discounts, which are the commercial drivers for switching water supplier in the first place. Discounts are estimated to be in the region of 0.5 per cent to 1 per cent.

In an effort to entice customers, water companies are offering “added-value services” like advice on reducing water costs through water efficiency measures. However, as part of the package, this added-value service will be charged for and integrated as a part of the overall deal, essentially providing revenue-take from customers as there is very little margin to play with. This applies to even medium to large water users, such as leisure parks, hotels, hospitals, universities, and big manufacturing and production facilities.

Yes, there may be a small saving when switching water supplier and transferring to consolidated billing for those companies or organisations that have multiple sites receiving water bills from many different water companies. This could be an attraction and considered worthwhile, but other than that there is very little in the way of innovation.

In fact, the Department for Environment, Food and Rural Affairs championed deregulation as one way to encourage innovation and efficiency from water companies. The customer’s expectations are high, particularly among medium and large water users, but the market needs to offer a stronger “pull factor” on price as there is very little on the table to encourage them to switch supplier.

There is a bright light at the end of the tunnel as a brand new national water supply company commenced trading this April. The Alternative Water Company Ltd was conceived by water audit expert Graham Mann, who heads up a leading water consultancy H20 Building Services based in West Yorkshire, with more than 25 years’ experience in the water industry.

Mr Mann’s firm has an impressive client portfolio, reducing water costs for many well-known UK companies in leisure, manufacturing, retail and hotels.

While other regulated water companies are offering 0.5 per cent to 1 per cent discounts, The Alternative Water Company Ltd is offering 25 per cent discounts on water supplies for medium to large water users to begin with and added-value services, such as expert water efficiency advice and online automated billing where the customer can view daily and overnight water use via a water flow data platform. It’s a valuable water management tool to drive down water use and project against future water leaks – a free added-value service.

HOW DO WE DO IT?

Unlike the regulated water companies, our hands are not tied as we are unregulated and we can obtain our water from the same places as the regulated water companies do from natural underground water sources known as aquifers.

We have delivered by setting up The Alternative Water Company Ltd, undercutting all the regulated water companies by a substantial margin

We identify and quantify the source of water on the customer’s site, agree a price per unit of water at 25 per cent less than the customer’s existing water supplier, then offer to design, drill and abstract water from the aquifer via a borehole and supply water to the customer. The supply is via a water meter connected to a web-based water flow and consumption monitoring system. This reduces the water costs to the customer by a minimum of 25 per cent.

Mr Mann says: “The government deregulated the English water market to encourage innovation, reduce costs of water to the consumer and encourage water efficiency while being kind to the environment. I guess that was the brief and we have delivered by setting up The Alternative Water Company Ltd, undercutting all the regulated water companies by a substantial margin.

“Water companies obtain their water from aquifers via boreholes, treat the water and pump it miles through an aged water infrastructure, leaking more than 3,705,000 cubic metres every day. Our leakage will be zero as our water delivery in most cases will be via a few metres of pipe from the natural underground source to the customer. We haven’t got the huge overheads in terms of maintenance and distribution, so the customer is benefiting from significantly lower operational costs.”

Mr Mann predicts the regulated water companies will lose hundreds of millions of pounds of water supply contracts over the next ten to twenty years. Just in the last quarter of the year alone, six clients with a total cumulative water bill of more than £12 million will all qualify for an alternative water supply, which will strip out £12 million-worth of water supply contracts from the English water retail market.

To learn more about the English water retail market go to https://www.thealternativewatercompany.co.uk/

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