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How would a substantial water company back charge impact on your business
Author: Graham Mann, Water Audit Expert.
A letter arrives on your desk containing a demand for unpaid water and waste water charges of £50,000 or £100,000. How would this impact on your business?
How would you defend such a claim? – Search google for a “Water Audit Expert” ?
Over then last few years very rarely if at all have I seen any published case studies on water company back charge claims, we here at H²O Building Services are guilty of that, we only have one here https://www.h2obuildingservices.co.uk/case-studies/dhl/ over £65,000 for DHL which is a significant sum.
We have in the past published lots of examples of substantial refunds which our water audit experts have identified as a result of a historical water audits being carried out, the water bill rebates claimed and approved have ranged from £2,000 on single sites up to £245,000, £500,000 and £1m across single and multiple sites but what if the situations was reversed?
Is your business at risk of a hidden liability such as under charged water services? – In actual fact I personally am of the opinion there are a vast number of businesses being overcharged and undercharged in equal measure yet rarely addressed. The water companies employ specialist consultants and many have specific departments focused on income generation, maximising sales, data cleansing and water billing rectification the titles do vary but all mean the same. The problem is the water companies in my experience identify undercharges and make claims to customers but never have I seen refunds sent to customers in equal measure which is not entirely unexpected.
We dealt with a substantial potential water company back charge case in Scotland, the client set aside £80,000 for an unbilled site, strangely enough this client was never advised by their existing water consultant about the full extent of the liability. We were asked to complete a historical water audit and the result was a £180,000 liability. It appears some water consultants shy away from this type of issue not wishing to report bad news to the client. In all instances each individual site should be thoroughly audited and it is the duty of the consultant to report both overcharging and undercharging.
One specific area where companies appear most at risk is those that have water bill validation and bureau service contracts with consultants that do not have the expertise to complete thorough water audits and very often the client is under the impression that the sites water accounts are all in order when in fact most of the time they are not. Take for example Energy Consultants, Energy Brokers and other similar companies they nearly all undertake bill validation but they lack the experience and expertise to complete a thorough job on the clients water bills as more often than not water is an “add on” or “added value service”, the gas and power is of course the main focus and meanwhile the water and waste water bills are often just checked for arithmetical errors and nothing more. The added value service in truth has little tangible value other than simply passing bills for payment.
We are dealing with a case right now where a well known quite large well respected energy management consultancy company have provided energy and water bill validation to a large national company for over 4 years and purely by chance we were completing a water audit for a Landlord company and we discovered the tenant was being charged twice for the same service. Yet the Energy Consultants bill validation did not pick this up! The potential refund is in excess of £80,000 and £10,000 per annum saving going forwards.
If you want to be secure in the knowledge your portfolio is correctly billed for water and waste water service both from an overcharge and undercharge perspective and your under a bill validation and bureau service agreement with an Energy Consultancy or Energy Management Company then my advice is to appoint a water audit expert and ask your bill validation and bureau provider to send the water billing data to the appointed water audit expert for a full detailed historical water audit and avoid any future back charge demands from your water supplier.