Water experts H²0 Building Services see increase in water company backcharge claims
Author: Graham Mann.
Over the last 12 months Yorkshire based water experts H²O Building Services have seen a marked increase in backcharge claims from water companies to business customers, these charges sometimes go back over 5 years and represent situations where the water company has undercharged or indeed failed to bill at all for water and waste water services.
Specific recorded back charge cases are varied, examples are charges linked to the rateable value of the site for roads and property drainage in Scotland, this is a charge structure levied on sites within Scotland.
Roads Drainage Charges – this covers your contribution to the public roads drainage system and keeping the roads free from flooding, charges are based on the rateable value (RV) of your property, even if you are exempt from commercial rates.
Property Drainage Charges – As you are connected to the public water and sewerage system you are charged for the cost of collecting and treating rain water from your property, again charges are based on the rateable value (RV) of your property even if you are exempt from commercial rates, you will see from the example below showing the calculation of charges.
You will note the value of the back charge from February 2009 to present day, some £13,600 for property and roads drainage alone, you will also note that in this instance the property and roads drainage charges are in fact 71% of the back charge, the higher the rateable value of the property (RV) the higher the value.
Back charge metered water bill – The danger with back charged metered water bills are that the business will not be aware of an unbilled metered supply which could well be leaking underground or being used inefficiently inside the building therefore clocking up a huge liability for the business. In the example above the metered water, waste water and standing charges are small in comparison to the other charges only 29% of the total bill. The total back charge in this case is £ 20,000 which for any business this would not be welcomed and is by no means the largest back charge we have recorded.
H²O have dealt with a case where a bill of over £160,000 was received by a customer of Yorkshire Water, in this instance the water company did the right thing and a negotiated settlement was reached, had the water company pushed for full payment the business would have folded.
The very best course of action any business should take is to seek expert advise and commission an historical water billing and infrastructure audit. There will be many benefits and the audit will reveal savings potential and also back charge liabilities. It will also give the business a clear understanding of the situation and enable the business to make informed decisions as to the best course of action, if not your business may be exposed to significant water company back charges.