Utility Week

20 | 12TH - 18TH APRIL 2019 | UTILITY WEEK Customers Conference report Future Retail #2, London, 13 March 2019 Industry urged to lead water progress Two years after the opening of the non- household water retail market, how far has it come and how much further does it need to go before it can be deemed a success? Katey Pigden attended the event with the answers. I mprovements that have been made since the water retail market opened for compe- tition on 1 April 2017 deserve recognition, but things need to move faster, was a key take away message from the Future Retail #2 conference in London last month. As the market was nearing its second anniversary, leading retailers, wholesalers, regulators, consultants and customers came together to explore how far the market has come and how much further it may need to go before it can truly be deemed a success. The opening of the non-domestic water retail market in England was hailed as the biggest transformation in the water sector since its privatisation in 1989. With transfor- mation, challenges will arise, but where there are challenges there are also opportunities. Are customers seeing the benefits? Phil Marshall, deputy chief executive of the Consumer Council for Water (CCWater), chal- lenged the sector to look at itself to see what has changed since the first year, what has improved and by how much. "Are consumers more empowered now? Are they getting the benefits of the market?" he questioned. Highlighting some of the good points of the market, he said there has been a "steady pace" of switching. But on the flip side, most consumers are "still unaware" of the market and there are more bill problems "than ever". wholesalers and retailers are continuing to undermine customer experiences. She advised delegates to "kick up the speed of improvement". Ofwat aims to publish its second state of the market report in July and Kelso said she hopes for a "more positive outlook" by then. Self-supply The opening of the UK's water retail market in April 2017 gave non-household customers more choice over where and how they source their water, but it also gave them the ability to "supply themselves". Self-supply has proved a popular choice for the likes of brewers Greene King, Marston's, Heineken and Stonegate. Other large organisations to have opted for self-supply include hospitality firm Whit- bread, so› drinks maker Coca-Cola Euro- pean Partners, laundry firm Berendsen and Blackpool Council. Telecommunications company BT was also recently granted its licence, while Not- tingham Council has applied but is yet to have been granted its licence. Waterscan has partnered with all the companies currently granted a licence – Nottingham Council, however, has decided to go it alone. Marshall said so far, self-supply seems to be "working well". "The public sector may well follow that path. The message to retailers is, those are your customers at the moment. What are you doing to make sure they are happy where they are?" he said. But Claire Yeates, director of Waterscan, insisted self-supply is "no more of a threat" to retailers than a new entrant to the market. She said the uptake in self-supply reflects the service businesses are receiving from retailers. "It's a challenge to retailers to improve their service," she added. Yeates suggested that while retailers "may not enjoy" losing customers to self-supply, it is symptomatic of a competitive market. "The purpose of this market is for people to have choice, and this is a choice that cus- tomers have made," she said, pointing out that some customers had opted not to self- supply as well, even a›er having discussions with Waterscan. "It's very niche, it's not going to take over the whole market – it isn't for everyone." Also speaking as part of the panel session was Matthew Power, utilities commercial manager at BT. Water is the "little brother" for BT, he said. The company spends just £6 million on the commodity, compared with £280 million on electricity, so "money "Billing is an issue that crops up time and time again and complaints year on year are going in the wrong direction." Regulatory intervention will be needed if the market doesn't work for consumers. If things don't improve Ofwat will have to "step up", he suggested. "Good stuff is happening but it's not moving quickly enough and working well for SMEs [small and medium-sized enterprises]." Emma Kelso, senior director of custom- ers and casework at Ofwat, stepped up to the podium next to discuss how to engage the "90 per cent of customers" who have still not bought into the open market. The regulator's aim for the market is for customers to save time, water and money, but there is "untapped potential". "You can't use the brand new market excuse any more," Kelso warned. Engage- ment from larger customers has skewed the market and there is still more work to do to attract SMEs, she said. Innovation also needs to be a focus for retailers – currently there's not enough and where there are examples, they need to be on a "bigger scale". Kelso said there could be the potential for bundled utilities as an offering, but "frictions in the market" need to be addressed. Data quality, poor aggregate performance of wholesalers and poor interaction between

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