Getting their act together

Competition in the water industry is coming. Andrew Bainbridge believes that this should act as a spur for suppliers to place greater emphasis on customer service

At long last it’s happening. Business water customers and suppliers are starting to believe that before too long they’ll see competition in the water market.

It’s been a long time coming. Many large users still don’t spend much time on checking their bills and reducing water and effluent use. And there are still some suppliers who aren’t gearing up properly for the day when competitors make bids for their customers. The faceless people who crack the Government’s whip – the Treasury – have now decided that water competition shall come to pass and Regulator Ofwat is working hard to make it happen.

When Ofwat asked for MEUC’s help in persuading large users to press for the English market to be opened up (following the success of the trail-blazing new competitive market in Scotland) we set up the Water Competition Action Group.

Our first conference at the NEC attracted a full house as did a subsequent one which was hosted by Ofwat at their Birmingham HQ. The third event, being held in Severn Trent’s HQ in Coventry, is oversubscribed. How different this is from the years when we struggled to persuade customers to attend meetings of our Water & Effluent Users’ Group.

Now, as bills increase (and are destined to get much bigger) and as there are genuine alarms about impending drought and floods, business is waking up to the need for cost reduction and risk management.

The best and latest news is that Ofwat has set up a Customer Advisory Panel with MEUC playing an integral part.

At the first meeting, I outlined the main problems which customers quoted in relation to their dealings with monopolist suppliers. While they all want proof that they are being charged fair prices, they have many other serious concerns.

In setting prices Ofwat has to allow the suppliers to set aside huge sums for domestic and business customers’ bad debt. Although debt from householders is much greater because there is more furore if a domestic dwelling is cut off when the bill hasn’t been paid, business debts are still substantial.

Customers say this is due to bad billing. All suppliers have their own systems and this can cause problems for multi-site users such as Asda, M&S, Tesco and Iceland. Clear, accurate billing is needed. If wastewater is billed on a different day to metered water, this causes problems with reconciliation. Consolidated billing is important for multi-site users but most water companies have a 6 – 9 month waiting list. Some sites only get bills once a year. Quarterly bills would be welcomed and business customers often throw up their hands in horror at estimated bills. On smart metering, users want visibility on supplier AMR data or the ability to fit their own devices and share the data.

Debt collection is another bugbear. If red disconnection letters arrive just 10 days after the bill, how are commercial companies expected to respond so quickly? Unless a business has a bad payment record, it is unlikely that they won’t accept their obligations and send the money. And the charge could be incorrect.

Perhaps the most important item on the Customer Wish List is the need for customers to have suppliers’ personal contact details. They need to be able to talk to real live human beings and not have to endure the (usually) frustrating business of dealing with Call Centres.

Some suppliers haven’t a clue how badly they communicate with their all-important business customers. Ofwat’s new measures to get users involved in price-setting will hopefully help to expose the need for real dialogue and cause suppliers to pull their socks up.

During the last flooding in Yorkshire, British Library was forced to close down for three days. Lots of businesses were in trouble, but as British Library and Yorkshire Water have been MEUC members for many years, I was able to get the communication catastrophe sorted out very quickly.

MEUC recently carried out a survey of members’ requirements and concerns. Percentage responses are these:

  • 64 per cent - bill levels;
  • 57 per cent - water efficiency;
  • 57 per cent - tariff options;
  • 53 per cent – metering;
  • 50 per cent - retail competition;
  • 46 per cent – leakage;
  • 35 per cent - service interruptions;
  • 35 per cent - environmental improvements;
  • 35 per cent - customer service;
  • 32 per cent - renewable energy;
  • 32 per cent - investment in infrastructure;
  • 28 per cent - water resources;
  • 25 per cent - biodiversity and the natural environment;
  • 21 per cent - flooding and resilience;
  • 21 per cent - climate change;
  • 21 per cent – carbon;
  • 14 per cent - sewer flooding;
  • 7 per cent - sewage works odour;
  • 7 per cent - water taste and odour.

We were frankly worried by the relative lack of interest in leakage, customer service and flooding. We hope that means customers have these issues well covered. If they need to think again, then we hope they will do so.

When we took a group of our large customers to meet Water Minister Richard Benyon, he and his team made it clear they regarded users’ views as vitally important. This is what we told him and what we said in response to the Environment Committee’s White Paper Inquiry:

  • the Government’s Water White Paper is an essential step in developing a customer-focused water industry.
  • there is a real appetite among our customers (who represent about 25 per cent of business consumption) to be able to choose their supplier and we therefore welcome the Government’s intention to establish a UK market for retail water and sewerage services and to reduce the threshold to zero, which will enable all non-household customers to benefit;
  •  we know that since retail water competition was introduced in Scotland in 2008, customers have benefited from reduced bills, improved customer service levels and greater water efficiency;
  • it is important that the Government meets its commitment to publish a draft Water Bill in early 2012 and that it is ideally included in this year’s Queen’s Speech. This will enable customers to receive the benefits that competition will deliver as soon as possible;
  • our recent research reveals that our members (ranging from Asda, Cable & Wireless, Celanese, Iceland, Mitchells & Butlers, MOD and Rolls Royce) are seriously concerned about poor levels of customer service from their existing suppliers and have highlighted their problems in connection with billing inaccuracies, tariff options, lack of advice on water efficiency, difficult access to meters, service interruptions, leakage, sewage works odour, water resources and risk of flooding and drought. It is clear that there is urgent demand for retail competition.

MEUC has held many meetings over the years to encourage best practice in water efficiency by arranging for presentations from members and water consultants on methods used to reduce consumption and costs. As a result many of the UK’s leading businesses have been spurred on to improve their efficiency. = Regrettably, water is seen as a minor issue in many large businesses and minimum time is spent on it. Suppliers must become much more active in offering advice and support. In Scotland, Business are challenging times ahead. We and our members will have to have our wits about us.

Andrew Bainbridgeis chairman of the Major Energy Users’ Council





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The benefits of competition

Currently, some customers are receiving thousands of separate paper water bills per year, which is inefficient. A competitive market would help to reduce the number of suppliers an organisation would work with as well as incentivise companies to improve the service they provide, such as switching to online billing.

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