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Special Report

A VIEW OF WATER DEREGULATION -

GRAND UNION WATER Co.

“W

ater supply to businesses and charities goes competitive in April 2017. The UK Water Act 2014 established the framework to create a market that will allow millions of businesses and charities (based mainly in England) to choose their supplier of water & waste-water retail services via the new competitive market. In Wales only consumers with a usage of 50,000 M3 a year can switch supplier.” “The UK competitive water market actually started in Scotland and the change to the water market in England is largely an extension of the pioneering Scottish pilot phase.” “Business and charity consumers have opportunity to reclaim billing overcharge, reduce consumption, reduce the cost of water & waste-water services, and have consolidated billing, or in other words one bill for multi- site consumers.” “MOSL (the government owned company that will operate the market between the water companies and the new water retailers who will face the consumer) has been working away making sure the systems that facilitate supplier-switching are ready and the market will start smoothly.” “Competition at the point of delivery for water services has undoubtedly been a long time coming, and while not as far reaching as it could have been, the updating of the water market is—make no mistake—the biggest news in the utility and procurement space in decades with the UK (not to say Scotland) leading the world.” “In the first phase of the Scottish market, consumers made annual savings of anywhere between 2.5% and 12.5%. When the English fully market opens, multiple water & waste-water companies could be competing for consumer’s business, albeit on thinner English margins. It is reasonable to assume savings will be forthcoming, but an exact quote cannot be specifically forecasted at this point. It is not unreasonable to think that savings made thru lower water rates could be doubled or significantly amplified by accompanying consumption reduction measures.”

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“Water Procurement Advisory space will NOT be regulated by Ofwat, just as Energy Advisory is NOT regulated by Ofgem. The lack of regulation of Energy Advisors has caused both poor and sharp practice to occur with limited recourse for business consumers. The complexity of energy offers is used by some Advisors to extract unfair value from transactions they intermediate. And while there were moves to regulate energy advisors they were abandoned by Ofgem. Water consumers will therefore be exposed to both the good and bad sides of the energy advisors as they move into water, some of them deploying the same

cold calling, sharp and poor practice that exists in the energy market.” “In the absence of proper regulation, the water procurement advisory space needs to regulate itself and demonstrate the highest possible level of ethics and integrity.” “Grand Union Water Co. with support from a working peer and several major consumers shaped a deliberately simple Code of Conduct that any water procurement advisor or energy procurement advisor choosing to work also in water can sign up and adhere to.” Www.GrandUnionWater.Com

THE PLANNED CODE OF CONDUCT FOR WATER PROCUREMENT ADVISORS (Dec-16 Iteration) 1.

No cold calls. An introductory letter must precede telephone calls from advisors.

2.

Advisors must have relevant training and qualification in client representation such as FCA, EMA or ISO accreditation or a minimum of three year’s experience of client procurement confirmed by a minimum of three business references.

3.

Advisors must be able to represent they have actually run a tender where suppliers have competed for the opportunity to supply.

4.

Advisors must be able to represent a supplier’s offer in a form that estimates the consumer’s annual budget on an agreed usage

5.

Advisors must be open and transparent on ALL fees, commissions, supplier rebates, margin shares etc. and able to estimate annual total commissions per a scenario agreed with the consumer.

6.

Notwithstanding where NDA applies, Advisors agree to provide - on demand - all communication relating to a tender process such that it can be checked by the client with suppliers

Energy Manager Magazine • january/february 2017

Energy Manager Magazine Jan/Feb 2017