A leading water consultancy expresses serious concerns with the selling of water self supply services for large none residential customers
What is water self supply and how does it work?
A leading water consultancy H2O Building Services is warning all large none residential customers to think again and take further expert advise from an independent water industry expert if they are in discussions with firms selling water self supply services.
As many of the claims as to companies annual savings are unjustified and not entirely true and short of key detail.
If customers had been given full and detailed disclosure and indeed alternative options to reduce their water and waste water bills then it is more than likely many would not have gone down the water self supply route says Graham Mann of H2O.
More detailed information is emerging from the market for example:- the emphasis on discussions with at least 2 companies offering water self supply services is on the so called benefits as opposed to modeling options.
One example is a company with Zero water industry expertise that is approaching large customers with water self supply deals when in fact they could not fully support the customers and manage self supply in any capacity and does not even seem to have their first set of company accounts!
It simply is not possible for such a company to offer a service of such vital importance such as the water and sewerage service for large businesses without the internal expertise.
In this particular instance the client could easily save £400,000 + a year in water efficiency savings that would bring the annual spend down to £1.6 million.
This being the case the water self supply estimated savings would be drastically reduced pro-rata and it would be more beneficial to negotiate a “wholesale plus” contract and scrap any ideas of applying and managing a water self supply licence had the consultancy in question applied water efficiency savings option first and then wholesale plus.
This client would not have considered water self supply and this clearly demonstrates the lack of water industry expertise and could result in a deal that would not live up to client expectations.
Graham goes on to say “We know of at least 2 clients that have chosen the self supply route and both have admitted ZERO savings from self supply alone, the savings have come from water leak detection and water efficiency which can be applied by going down the wholesale plus route with a water retailer.
Clients who are on self supply read their own meters, self bill and pay outside consultants to do this, which means the outside consultancy are effectively taking on the water retail costs so these are not actually saved.
Far more cost effective if clients really do wish to take the water self supply route is to commission water industry experts to firstly apply for the self supply licence and then if and when approved commission them to train the clients staff to manage water self supply internally at substantially less cost.
This is far more cost effective, but I doubt the companies selling water self supply would wish to go down that route or they would have offered it.
Another client has been given a savings figure on self supply yet the water retail company offering the service cannot possibly deliver the savings they have said are available as the client is already on a wholesale plus contract that is wholesale price plus a water retail management fee, therefore no savings would be made.
My advice is to firstly work with a water industry expert and : –
Audit all your water and waste water bills for historical overcharging and incorrect charging.
Correct those bills and deliver reduced charges going forwards and refunds due to historical billing errors.
Compile a water and waste water data base, and identify those sites that need detailed surveys to identify savings opportunities.
The drive through water and waste water efficiencies, leaving no stone un-turned, examining all options for cost savings.
Enlisting water industry experts will ensure all areas of savings opportunities are explored as most clients could reduce their costs by between 20 – 30 percent.
You do not need to go self supply to achieve these savings
Do the numbers after all your efficiency and other cost savings have been exhausted and then decide, BUT take independent and impartial advise.