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Open Water – It’s Time to Talk

We are one month into shadow operations and only five months away from a non-residential open water market in England

Testing the Water

The industry is firmly back on track with open water and to offer over 1.2 million eligible businesses and other non-household customers in England the opportunity to choose their water and wastewater retailer from April 2017.  We applaud Market Operator Services Ltd (MOSL) for successfully getting the water companies aligned and the infrastructure in place in readiness for the shadow market; a six month period in which the water retailers and wholesalers will operate their systems and processes as if ‘live’ (as though the market were open now) – testing the water, so to speak.

MOSL chief executive Ben Jeffs commented in an Open Water newsletter: “The shadow market phase is an invaluable learning opportunity for both MOSL and our members, the market participants. The lessons we learn during this period will ultimately help create better processes and an operationally proven and stable central system for when the market goes-live. And that should mean that customers have the best possible experience of the new market.”

However, there’s plenty of evidence that many participants are jumping the gun, cutting over to the new market landscape now rather than waiting for the official switchover next Spring. Whilst this is seen as a positive, helping to create a “seamless transition”, our concern is that the customer could be put under undue pressure to make decisions about their supplier when they are simply not ready to do so or have not considered the full range of options. Indeed the Open Water website is encouraging customers to “choose your water supplier now”. Only 8% of businesses aware of open water market

All this and yet a recent study by the Consumer Council for Water found that only 8% of businesses were aware that the water retail market was scheduled to open and that they could soon switch suppliers. This is despite the fact that 60% of businesses polled were in favour of having an option to choose their water and wastewater provider.

Our view is that: with no awareness of the opportunity, there will be no preparation and therefore, potentially reduced or no customer benefit in the short, and possibly, long-run as parties will be going into negotiations blind. We have been urging businesses to get their water consumption and cost data ship shape before dipping a toe into open market waters and this has never been more urgent.

Whilst a year’s water data is most beneficial, all information is useful. This does not need to be at all onerous on the company concerned as our Water Management services will deliver an extremely comprehensive and uniquely independent insight into the current situation, followed by strategic guidance ahead of future water supply decision making.

Mind the Gap

OFWAT is mindful of the awareness-gap that exists and is busy trying to understand just how big this gap is. The regulator will soon reveal the results of a national survey that it recently commissioned to test 1800 companies’ understanding of the market shake-up. At the same time, the water companies themselves are being quizzed about the extent of their efforts on both awareness raising and marketing. OFWAT will use this information to conduct a gap analysis.

An OFWAT spokesperson said of the research: “OFWAT wants to ensure that all eligible customers have access to reliable, impartial information about the market, free from company influence. This will build customer confidence in the market and enable informed decision-making by customers about their choice of water services retailer.” Hear! Hear!

This is an important step and one that we too have been concerned about. Our own survey, conducted at the Energy Management Summit several weeks ago, revealed, perhaps unsurprisingly, high levels of awareness amongst our contacts; thus demonstrating further the knowledge gap. All ‘agreed’ or ‘strongly agreed’ when probed on the following key questions:

  • I fully understand the market changes and how this could impact my business
  • I know what I need to do to prepare and maximise opportunities
  • I believe my business is well prepared and ready for the opening market.

Interestingly, most respondents highlighted anticipated improvements in customer service and reduced administration time as the biggest advantages of the open market, as opposed to cost savings, revealing low expectations of achieving a significant financial benefit.

When asked about their concerns, communication came top of the list. Fast and effective liaison between wholesalers and retailers were cited as a potential problem if there is no solid relationship between those companies and processes are underdeveloped.

Whereas previously a company would talk directly to the wholesaler to get works done, it will soon have to go through their retailer as a middle man, leading to delays in action and maybe an increase in that burdensome admin that company bosses were hoping to diminish.

Time to Talk

We support any initiative aimed at encouraging engagement and participation in the open water market and have a wealth of information on our website.

For bespoke advice on any matter across the whole water spectrum from data to procurement, from recycling to reduction strategies, get in touch on 01243 839880 or email info@waterscan.com.
There’s never been a more important time to talk about water.