News

Water retail market news – Have you seen in the Times today? “Deluge of water bills after Thames Water supplier row”

“Thousands of large-volume water users including the former Olympic Stadium face back bills running into tens of thousands of pounds in a fractious dispute between water companies.

 

Castle Water, the independent company that has taken over the management of non-household water charges in London, has accused Thames Water of orchestrating “a rip-off” of consumers in a row over £14.4 million of disputed back charges which affects 4,331 businesses and other non-domestic sites.

 

Thames has hit back, accusing Castle of using “scare tactics” and publishing “inaccurate and misleading information”.

 

The dispute is threatening to bring the government’s introduction of competition into the water industry into disrepute. At issue is responsibility for the historical upkeep of water meters and the accuracy of billing records during the liberalisation of the non-household supply market in 2017.

 

That shake-up enabled non-household consumers to switch their billing arrangements to new independent market entrants or rival regional players acting as “retailers”. Industry figures suggest that switching can produce more efficient billing and reduce bills.

 

Thames Water sold its entire non-domestic book of customers to Castle, a start-up, for £100 million.

 

Castle, which operates 200,000 customer accounts, claims that in the case of 4,331 premises the accuracy of bills over the past two years is in question because of faulty or inaccessible meters or poor historical record keeping by Thames. Under the new market arrangements, Castle charges customers based on the “wholesale” volumes and prices charged by Thames.

 

Thames Water is one of the country’s largest water and wastewater service providers, with customers across London and the Thames Valley area.

 

Multiple NHS sites are affected in the dispute, as are University College London, the universities of Surrey, Kingston, the South Bank and St Mary’s and 50 schools. In the worst case it is understood that one school with an annual water bill of about £10,000 is facing back billing of £70,000.

 

The row went to the disputes committee of the panel which oversees market competition. It has ruled that Castle is in breach of regulations because it should not be estimating customer bills.

 

Castle has countered that it has had to issue estimates because it cannot rely on Thames meters or records and has accused Thames of levying inflated back charges based on inaccurate “industry level estimates”. It cites the case of leisure facilities in the Olympic Park in east London including what is now the West Ham United football stadium, where original bills were based on the much greater footfall during the 2012 Games.

 

Letters warning customers of increased charges have gone out signed by John Reynolds, Castle’s chief executive, explaining the impasse and promising: “We will do everything in our power to stop this rip-off.”

 

Thames hit back yesterday. “This letter to customers is very concerning as it is inaccurate and misleading on several counts,” it said, accusing Castle of underestimating some customers’ usage, leading to underpayment.

 

It added that Castle had “misunderstood” the rules governing the new competitive market and the transfers of responsibility, stating: “We’re surprised that such a large retailer is using such scare tactics.”

 

For the first time since the introduction of the competitive water market Ofwat, the regulator, has indicated that it will intervene to settle the dispute”

 

Robert Lea, Industrial Editor, The Times  – 11/02/19

 

Senior Partner Graham Mann of Water Consultants H20 Building Services comments ” I have worked in the water industry for over 30 years, in my experience Thames Water data has been flawed historically, indeed have almost all water companies to a more or lesser degree.

To be perfectly honest it does no surprise me in the least that a situation like this has blown up as billing errors are rife in the water industry and Thames Water’s record is not squeaky clean for instances such as these case studies show: –

 

Local Authority Park London – Thames Water charged the local authority over £150,000 for 6 years based on estimated reads – yes you read it right estimates.

The reason ?

They could not find the water meter!

Engineers from H20 Building Services were dispatched to site and located the water meter underground in the park and no water had been used since the last actual reading 6 year previously – Refund £153,000.

 

National Pool and Leisure Company – Thames Water overcharged on waste water charges over 12 years to the tune of £66,000 – this was fully refunded the full 12 years.

 

National Leisure Company London – Thames overcharged on waste water charges and refunded £24,000.

 

So how is a water retail company in this example Castle Water able to bill their customers with a high degree of accuracy when the wholesale supplier in this case Thames Water holds incorrect or missing customer data.?

 

Since the water market deregulation it seems to me that the water retail companies have been forced to burden the costs in resolving numerous billing errors due to poor record keeping and administration of their customer accounts by the wholesalers.

Thames Water are not unique in the overcharging or indeed undercharging as pretty much all other water wholesalers have billing accuracy issues .

 

In reality the water retail companies should be given the right to levy the extra administration charges that are incurred on both undercharging and overcharging.

 

It is simply not acceptable that cases of this kind are passed onto the water retail companies to resolve.

 

Meanwhile I fully endorse Castle Water’s stance in informing their customers of the back charge situation, proactive customer service is what is needed here.