Water Market Deregulation

Following the deregulation of the Scottish market in April of 2008, businesses are now able to choose their own water supplier. Households are not affected by this; your personal home should still be paying for Scottish Water’s input alongside your Council Tax, but before 2008, The Scottish Water Business Stream held monopoly over the countries water services, meaning that they spent 3 years unquestioned in what they charged businesses.

The deregulation of this product deliberately forced a split between wholesale and retail prices; today, Business Stream still runs the retail side of things, while Scottish Water owns wholesale, and allows us to be met with significant opportunity for savings.

After proving successful in Scotland, England followed our deregulation and follows the model laid out for us.

Before we can help you understand why it may be important to switch, we first must consider what it is that you are paying for. If you do not understand the ins and outs of the water industry or your charges, it may be impossible to consider what changes may be right for you and therefore move forward into comparing suppliers.

So first, lets talk about your water bill

As we explained, you can pay your water bill as included in your Council Tax. In this case, your bill is calculated based on the council tax band that your business is in. You should be able to find this on your letting agreement, or by asking the building agent/owner. The updated rates based on your council tax were published by Scottish Water for 2020 in this “what you pay” document.

Scottish Water Rates
Domestic Scottish Water Rates

Some buildings have a water meter fitted, which, like electricity or gas, allow you to look at how much you use. If you use a water meter, then your water is being supplied directly through Scottish Water. In this case, your bill is made up of three parts;

  • A fixed charge
  • A charge for the amount of water you used, measured by the meter
  • An estimated charge for wastewater

A default rate or “fixed charge” exists as a limit of how much you can be charged. Usually, prices will vary from this number based on a variety of factors mentioned above. Your fixed charge is made up based on size of your meter and the volume of water recorded on your meter, and looks a little bit like this…

 

Volumetric Water Charges Expected charge
First 25m³ – up to 20mm £2.4438
Volumes after the first 25m³ – up to 20mm only £0.8855
Volume charge for larger meters £0.8855
Waste Water Charges £.m³
For the first 23.7m³ – up to 29mm meters only £3.1598
For volumes after the first 25m³ – up to 20mm only £1.4942
Volume charge for large meters £1.4942

You can find your current supplier by checking your latest bill.

Business Water Contracts

Scotland

Scotland is the first country in the world to offer businesses their own choice of water supplier; because of this, there are more options than ever and more competition between organisations, leading to lower prices and more deals.

When we deregulated the commercial market in 2018, Scotland’s retail water sector was valued at £330million, with The Scottish Water Business Stream nearly halting their 200,000 active supply sites due to this.

26 licensed water services now operate in Scotland with all water and sewage pipes in Scotland belonging solely to Scottish Water, which they then sell on in bundles to interested companies. They explain their charges for businesses and developers here.

Competition in the water industry should be considered by all sizes of businesses, charities, and non-profit organisations says Scotlandontap, who highlight that being forced to make their offers more captivating results in:

  • Lower water and sewage prices
  • Improved and specialised services
  • Greater Water Efficiency
  • More innovation in the industry

The deregulation of the Scottish market also led to more a number of industry improvements as a whole, including less CO2 emissions and a better understanding of our water use; services advising harvesting and recycling water as a business, and consideration to leak detection and repairs in water pipes. Just like gas companies, this promotes the act of holding suppliers accountable to the standards they set out, the prices they guarantee, and the quality of their product.

England

Non-household customers in England are able to pick between water suppliers following their transition into the Scottish model in 2017, with 1.2 million businesses, charities and public sector organisations being given the opportunity to make savings and consider what aspects of this service is a priority for them.

Previously, the only way to dispute a problem with your water supplier in both Scotland and England was to make a formal complaint, but there was no option to switch suppliers or do further research into the market. Now, the Open Water Market is the largest competitive retail market in the world. At this time, it is astonishment that Wales and Northern Ireland decided against following in their sister countries footsteps.

In England, though, businesses that have branches all over the country are able to receive one full bill for all of their locations, over the added administration of responding to a handful of bills directed towards the same company. In England, Ofwat, England’s watchdog intends to force the wholesale price of water down in 2020, order to rebalance the market and see the most savings.

Today, we calculated the top ten cheapest suppliers for businesses in England. With a difference between your highest, and lowest tariff being around £4.590.26 per year.

SUPPLIER WATER £/M3 WATER FIXED WASTE £/M3 WASTE FIXED TOTAL BILL
1. Northumbrian £1.0646 £38.77 £0.7793 £77.02 £2,842.42
2. Thames Water £1.4570 £17.84 £0.8963 £44.71 £3,592.50
3. Severn Trent £1.5172 £45.59 £0.9400 £39.53 £3,770.92
4. Anglian Water £1.3472 £58.00 £1.4212 £37.00 £4,247.60
5. United Utilities £1.7010 £48.07 £1.1050 £0 £4,257.07
6. Yorkshire Water £1.3621 £40.86 £1.5599 £48.91 £4,472.60
7. Southern Water £1.9998 £46.00 £1.2484 £18.00 £4,936.30
8. Wessex Water £1,2600 £50.89 £1.9988 £85.85 £5,024.94
9. Business Stream £1.5652 £68.22 £1.8391 £79.36 £5,254,03
10. South West £1.9718 £50.85 £2.9162 £49.83 £7,432.68

Both retail and wholesale water in England is also provided by separate owners, with the retail business water market working alongside that existing in Scotland, and is regulated by the Water Industry Commission for Scotland, so a lot of their guidelines may overlap.

Switching

So, if your business is interested in a switch, it is important to consider a number of aspects first;

What is your priority? – A number of businesses have complaints about their current provider, and we believe that making the switch is the first step to making that change, and saving money.

Do you wish to cut down on your bills, or get the same bill for a number of properties all at once? Maybe you just want to get a better understanding of the offers available in your price range, and that is okay too. Price comparison sites can give you trusted advice directly, and may lead you to exclusive offers. For example, some businesses outside of the industry (such as Rugby Football Union) offer members a 22% discount to Business Stream customers.

Do you want to support a smaller business, or fight towards reaching a global net zero? It is clear that over the last 10 years, a number of companies have been taking steps to look into more sustainable sources for all of their materials; maybe you can see somebody getting better elsewhere, or creating a lesser environmental impact. Most switches can be completed within a month, with no interruption to the water in your business, so there really is no reason not to, if you are looking to transfer into becoming a more eco-friendly business.

Navigating the competitive market with us leaves with further opportunities to negotiate our prices and find discounts that wont be available elsewhere.

Since the market opened,  60% of Scottish businesses have seen savings from £113million, with £73m in discounts and £54m in efficiencies.

Once you have your Supply Point Identification Number, or SPID, suppliers and organisations will be able to do a lot of this work for you, just like that of your postcode calculating your Council Tax. Whatever the circumstances for your switch, we want to help you to find a company who’s morals and charges you trust.

For more information about this post and how Energy Solutions can help with your Electricity, Gas, or Water, click on the links, or check out the contact details at the bottom of the page.