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Efficiency Leads Self-Supply Users Forum Discussion

A REPORT ON THE AUTUMN 2022 SELF-SUPPLY USERS FORUM

Representatives from the water market regulator Ofwat, market operator MOSL, and the market’s Strategic Panel, joined the British businesses that have taken control of their water for the Self-Supply Users Forum on Thursday 8th September 2022.

In a quarter that has seen a public focus on water like no other, it was reassuring to hear that water efficiency is finally rising up the industry agenda. The indications are that, after a near-nationwide declaration of drought and a Defra consultation driven by the Environment Act, there is a positive step change which has created a mandate for action at all levels.

This action cannot come soon enough, as meeting Chair, Neil Pendle, pointed out. “The industry has done well to secure business water supplies this summer, but we are going into the winter, and probably spring, with a substantive deficit. We will need three wet winters to recover adequately,” he said.

He went on to draw attention to the drought bulletins that members of the Forum receive to help them manage situations at a local level, and highlighted that Waterscan is working with all Wholesalers on their behalf, to improve drought and flood notifications to businesses because, “it is difficult to proactively help customers when communication from Wholesalers comes after incidents are reported on national news.”

Later in the meeting, Barry Millar, on behalf of the RWG Water Efficiency Sub-Group, spoke about the role that British businesses will be expected to play when it comes to conserving water supplies. For the first time, non-household water users will be required to reduce consumption by 9%, as part of a total national reduction target of 20%. Stemming leakage will also be required to achieve this goal. He advised that delivering this transformation will require funding in the region of £30m and that this would likely lead to water efficiency levies being added to customer bills. However the market decides to manage this efficiency drive, businesses should anticipate higher water prices during 2023 – and beyond, once PR24 (the water market’s periodic price review) has been formally adopted. Waterscan is preparing a detailed price impact assessment for its customers to assist their planning.

Businesses that Self-Supply their water and wastewater services are ahead of the game on all aspects of responsible water stewardship, already well-informed and well-equipped with the necessary data and guidance to deal with any new market or statutory requirements. Indeed, this community of forward-looking businesses maintains its market-leading performance, recording a rolling 12 month MPS (market performance score) of 99.09%, nearly 10% ahead of the rest of the market. Over 4,000 customer invoices and credit notes are validated each year and yet data accuracy remains at 100%, while the exceptionally low level of long-unread meters stands at just 0.95%, approximately 100 meters.

Nick Hayes, Waterscan’s Commercial Director, called out the benefits of the newly introduced Wholesaler-Retailer bilateral hub, instigated to improve the resolution of customer billing issues. “The bilateral hub is demonstrably impacting market efficiency and we’re seeing an increased appetite from Wholesalers to explore options to strive for better performance across the board. This is something we’re driving through regular Wholesaler engagement meetings and a new approach to holistic reporting which gives transparency on comparative trading party performance and holds Wholesalers to account,” he said.

The meeting also heard from MOSL’s Finance Director, Steve Formoy, who presented the market operator’s three-year business plan, and Trisha McAuley, Chair of The Strategic Panel, who shared the outcome of its consultation on market priorities, defined as: value creation, customer service excellence and water efficiency. Thanking attendees for their valuable input into this consultation, she asked for continued engagement from the Self-Supply community to deliver on these. Mirena Hadzhigenov, Senior Associate – Business Retail Team at Ofwat was introduced to the group and she provided an update on the regulator’s annual State of the Market publication.

A full meeting report can be found here. The Winter Self-Supply Users Forum is to be held on Thursday 1st December in Birmingham.

28th September 2022