On 1st April 2017 over 1 million businesses in England were able to start choosing who they bought their water and sewerage services from. Until then, this was something that only very large consumers of water (>5m litres p.a.) could do. Now small and medium sized enterprises (SMEs) have the freedom to choose from a range of water retailers, with some opting for a self-supply licence, buying water directly from the wholesaler.
Wheatley commissioned a survey of senior business leaders in SMEs across nine regions that make up England, which was conducted in May 2017 – one month after the market opened. The survey found that 58% of companies interviewed are now aware of the deregulation, compared to 20% in November 2016 .
The survey also revealed that 21% of eligible SMEs switched water provider in the first month of deregulation, with over 50% of those who haven’t yet switched planning to do so within the next 18 months. Perhaps unsurprisingly, price was shown to be the most important factor when making the decision to change water retailer. 77% of respondents rated price as ‘extremely influential’ or ‘very influential’ in their decision to change water retailer and 83% of respondents saved money by switching their water contract.
Whilst all of this is very positive from a consumer perspective, the water industry is confronting the same conundrum facing energy suppliers at the advent of smart metering: How to deal with all the extra market data generated by these interactions and, subsequently, the data driven by enhanced water metering. It will become increasingly important for water wholesalers and suppliers to examine their IT infrastructure and update any legacy systems that are unable to cope with the increased demand.
As water metering is not currently mandated, there is no common standard for data provision or communications, which presents challenges for retailers, not only in getting value from the data, but also how to receive and treat it. With some companies installing AMR, some AMI and many businesses left with dumb meters to be read manually, the data available to retailers for analysis is inconsistent. In some cases, retailers have taken it upon themselves to provide customers with smart meters, only to find that technology removed by wholesalers as they have not recognised or understood the devices implemented.
In order for retailers to provide the best services to their customers (reducing bills, providing a consistent supply etc.) the industry must look to standardise the information available and make it simpler to gather. Whether this can be achieved by collaboration between wholesalers and retailers, or whether it will need to be mandated remains to be seen.
For more information on our survey, visit our microsite where you can filter all the results and download the whitepaper summarising the findings - if you so wish. www.wheatleyinsights.co.uk
If you would like to discuss how Wheatley can help you understand and solve your current business challenges, contact us using the button at the bottom of this page.