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    • Water, water everywhere but....
    • 18 September 2017
    • The world’s largest competitive water market is officially open. We collaborated to provide an OJEU compliant framework that is available to members. Our advice, however 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 member’s requirements.

      Those of you accustomed 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 alike, face up to the challenges of a new market and the complexity it will bring. The important thing is that the market players including; Market Operator Services Limited (MOSL), Office of Water Services (Ofwat), Department for Environmental, Food and Rural Affairs (Defra) and the Consumer Council for Water (CCWater), do not stop their work at market opening but ensure that the market they have created delivers a quality experience to all seeking to benefit, and one that allows them to trust the market and in turn help further develop it.

      So where are we today five months into the market opening?

      Despite minimal opportunity for cash savings due to the very low retail margin on offer (retail is only 7% of your bill) it would have been surprising if anyone were to switch but early indications suggest that there have been around 10,000 switches per month. So there is a market, albeit relatively small.

      So, who is switching?

      Evidence is pointing to large national multi-site businesses which isn’t too surprising as the ability to have one supplier billing rather than 20+ reduces their administrative burden. Small businesses including 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 some claiming 25% savings on water bills. The caveat is the subject to qualifier stating you need to combine water with all your utilities to achieve such savings, and event these are unrealistic.

      We are aware of a number of issues where billing has simply 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. This is not just affecting our members but also on a wide scale. There are also 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.

      In our dealings with all parties we are confident that the desire and focus is there to make this work but our position remains that we cannot, at this moment, recommend any early further competition or eAuction until these issues are resolved.

      So what are we recommending?

      In short, let the market settle. We will continue to engage with all parties to ascertain readiness. Work in this area included a two day framework readiness review during the week of 10th July. There are also some further supplier consolidations occurring that need clearing before we recommend competing which are likely to be concluded by the end of August.

      The earliest we would recommend doing anything would be after October 2017 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.

      So now it’s your turn.

      Any new market requires customers to shape it. The Water Retail Market has an opportunity to learn from deregulation in previous markets and we believe there is a desire to do so. 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 do contact any one of the following, let us know how you get on and what feedback you receive:

      mark.anderson@ofwat.gsi.gov.uk

      stephen.beddoes@ofwat.gsi.gov.uk

      priya.sinha@ofwat.gsi.gov.uk