Water audit experts express concern over the Scottish Water Retail Market

Author: Graham Mann, Water Audit Expert.

I have been watching the Scottish Water Retail Market mature with interest and over the last 12 months having completed detailed water audits across a wide range of clients we decided to enter the arena and approached the new water retail providers in Scotland in order to discuss and agree commercial terms with them and ourselves.

Off we went a brilliant year switching some £5m worth of water contracts, then came the water bills. I have to tell you that if we did not provide the safety net for these customers in the form of water bill validation, ensuring the bills were correctly levied and authorising them for payment considerable overcharging was starting to creep in. It took many months working with water suppliers to agree billing formats and correct water bills. This we can live with up to a certain extent but what of those customers who have switched water supplier and do not have the luxury of a safety net provided by a water bill validation business.

Here lies a problem, my estimation is a great many companies that have switched water supplier naturally assume the charges levied are correct going forwards and all historical charges that were levied by the previous water supply company were corrected. Well not so as one of our new clients who had changed their water supplier direct and prior to contacting us was being billed for water services without a formal contract! indeed a water audit revealed a £ 22,000 overcharge. A short time thereafter we were supplied a years worth of water and waste water bills for a Seafood process company the charges for the discharge of trade effluent were horrendous, on the face of it with minor changes in the disposal of the waste derived from fish processing savings of over £300,000  were identified by our water audit experts.

The water supplier concerned claims that “they have led the way in customer transfers” and also that “the introduction of competition has helped to drive efficiency in the industry and provide service and cost benefits to customers”

Not in this instance, there appears more benefits to the new water supplier as over a 3 year contract they would have generated an extra £900,000 in revenues.

There will without doubt be a great many more customers duped into thinking they have a good deal and maximising savings when in fact they are not.

We are also experiencing extremely long timescales to process simple requests such as amendments to charges that are incorrect, up to 6 months and beyond. Tariff reductions such as reducing the sizes of the water meters to reduce annual standing charges over 1 year. The loser the customer of course, the water retailer still coins it in!

What happens when we send in a formal complaint? – They blame Scottish Water the wholesale provider, the whole system and interface between water retailer which there are now 18 of in Scotland and water wholesaler is not working efficiently and the customers are paying the price, just wait until the English water market opens up in April 2017. 18 retailers I feel is more than enough for the size of the market within Scotland.

Just recently I have come across 2 water companies who are not apparently going to deal with 3rd party water consultants such as ourselves Anglian Water Business said “we do not deal with consultants, we will get our own business”. Also Yorkshire Waters licenced water retail arm in Scotland  Kelda Water Services, they claim by “going through 3rd parties the offer to the client can become uncompetitive” and “normally we would suggest that the client should negotiate directly with the water retailer to ensure savings are maximised” also “Kelda Water Services would not normally agree any commercial terms with a 3rd party”. An interesting move by these water companies.

I can see why these two water companies would not want us or indeed any other water consultancy involved for the reasons I have outlined previously. If the water companies cannot perform in both service and expertise to include billing accuracy then we will. At the end of the day it will be the customer that decides their fate as without them they have no business.