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18th Sep 2017

Further to our published article of June 5th 2017 detailing the new Water, Waste Water and Ancillary Services Framework please see below additional guidance issued by The Energy Consortium that we are sure members will find of interest.

Water, water everywhere...

The world’s largest competitive water market is officially open. We have put together an OJEU compliant framework that is available for use but our advice at the moment is to hold off from competing your water and waste supplies until the market irons out a few teething issues and the suppliers systems can consistently meet members requirements.

Those of you used to the systems of energy suppliers won’t be surprised that there will be bumps in the road as suppliers, the market operator and regulators face up to the challenges of a new market and the competition it will bring. The important thing is that the water companies, MOSL, Ofwat, Defra and CCWater do not stop their work at market opening but ensure that the market they have created delivers a quality experience to our members that allows them to trust the market and in turn help further develop it.

So where are we today five months in to the market opening? Despite little opportunity for cash savings due to the very low retail margin on offer (retail is only 7% of your bill) it would be surprising if anyone were to switch but early indications are that there have been around 10,000 switches per month so there is a market, albeit relatively small.

So where are we today five months in to the market opening? Despite little opportunity for cash savings due to the very low retail margin on offer (retail is only 7% of your bill) it would be surprising if anyone were to switch but early indications are that there have been around 10,000 switches per month so there is a market, albeit relatively small.

Who is switching? Evidence is pointing to large multi-site business which isn’t too surprising as the ability to have one supplier billing rather than 20+ reduces their administrative burden. Small businesses, single water boundary customers, are finding it harder to compare offers and benefits so are less engaged. Part of the reason for this is the potentially misleading adverts from the TPI sector claiming 25% savings on water bills, the caveat is the fast blurb following that states you need to combine that with all your utilities, even then it would be hard to prove.

At TEC we have heard of a number of issues where billing has switched from the old wholesale company to the new retail company or where a supplier has declined to enter the retail market and ‘sold’ their book to another supplier. We are aware that this is not just affecting our members but is on a wider scale. We are also aware of issues with the data that was uploaded into the central market operating system, used for switching, not recognising which meters are in scope and which are not.

All of these are fixable problems and the market is working hard to fix them. In our dealings with all parties we are confident that the desire and focus is there to make this work but TEC can’t, at this moment, recommend any early further competition or eAuction.

So what are TEC recommending? Let the market settle. TEC will continue to engage with all parties to ascertain readiness. We took part in a two day framework supplier readiness review w/c 10th July and understand where they are at the moment. There are some further supplier consolidations going on that need clearing before we recommend competing but this is likely to be through by the end of August.

Q4 2017 is the earliest we would recommend doing anything but in the meantime we will be re-issuing the data collection template and your Member Services Advisor will be available to answer any questions.

Our final point is ‘now it’s your turn’. In any new market it requires customers to shape it. The Water Retail Market has an opportunity to learn from previous markets and we believe it wants to. Following a recent meeting we attended Ofwat, the Water Regulator, is keen to hear from members about your experiences of the new retail market. If you are interested in sharing your experiences, please contact us via the CCS link below.

For more information on the framework agreement visit Crown Commercial Service.

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