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Issue link: https://fhpublishing.uberflip.com/i/221850
Interview the draft Water Bill was publimit the advantage that stems from their own"You can't be an advocate of past year, since market has really come alive. lished, that the ership of 100 per cent of the market on day one. Business Stream is subject to six such competition and then bitch Powles admits: "We've lost more customers months than we've lost before, conditions in Scotland, including a requirewhen you lose a customer" in the last 12 reflection of the fact there are and that's a ment to publish the tariffs it agrees with cusnow 13 competitors in the market and probtomers so other retailers can view them; to ably more to come." ensure charges are cost-reflective to prevent loss-leading Somewhere between 5 and 10 per cent of eligible cusdeals that would price entrants out of the market; and to tomers have left Business Stream. Powles takes it on the c omply with financial ratios agreed with regulator Wics. chin: "You can't be an advocate of competition and then Also under the level playing field banner, Powles bitch when you lose a customer. You've got to take the wants access to the English market to be regulated, not rough with the smooth. I've done 30 years in competitive negotiated. That means something similar to the Scottish retail markets and that's what drives you to do better." system, under which the regulator agrees a wholesale He says there is a healthy variety of offerings from the price with Scottish Water (negotiations for 2015-21 are 13 licensed providers and that businesses are engaged by currently underway) and that's the price all retailers pay. the possibilities competition presents. Seventy per cent And it comes with a set of minimum service standards of the market is off the maximum retail price now, says they can expect from the wholesaler. Powles, because "they've chosen to engage in a different Powles notes: "There's a lot of talk [in England] about way, whether that's taking a discount for direct debit, bilateral agreements. Having done it now with a number going onto ebilling, or a different type of service". of customers in England, it's time-consuming, it's costly As for Business Stream itself, Powles reminds me that and it's slow. One million customers spread across 22 when we first met (around the time of Scottish market wholesalers doesn't sound that confusing but it could opening), I asked him whether all he would be doing be… if you're trying to serve a multi-site retailer, say, is managing decline. He delights in refuting my early with branches in all 22 regions, how do you get to a point assumption. Sure, the company has lost some customwhere you can give them one electronic bill on a monthly ers, but it has swollen from a team of 130 to over 300; it basis that's easy for them to understand? If we don't has made some headway in the English market despite address some of these issues, we'll put more cost in for the current less-than-conducive conditions (working, for retailers, which will minimise the benefits to customers." example, for Bernard Matthews and Marks and SpenPowles would like incumbents to be free to quit the cer); and when work is put to tender, it wins as many retail market should they wish. He explains: "If you don't accounts as it loses on the back of the customer insight it create an exit clause, you end up with people that neihas developed over the past half-decade and the suite of ther have the appetite nor the resources nor the skills to value-added services it has honed. be good retailers but have been press-ganged into it – Particular success stories, says Powles, include a that's got to lead to sub-standard customer service or the strong self-serve digital platform called My Business potential for gaming." Stream, which over half of its customers have taken up, Powles clearly holds the Scottish retail model in high and a redesigned, easy-to-understand bill. Beyond that, regard. Is it flawless? "No market is perfect," he says, but some of the company's added services reach beyond there is a rolling programme of improvement. "Probably retail. Powles explains: "On water, we can do everything up to 100 changes have been made to improve things and from auditing through to greywater recycling, to rainwatweak things." He continues: "From a structural point ter harvesting to boreholes. In waste treatment, we can of view, I think the market is fair. I think it's customerdesign, build, operate and maintain a range of plants. focused. Customer protection sits at the heart. The wholeWe've now got a fleet of temporary treatment plants that sale price creates transparency in that everyone buys at the do different things." same price. The wholesale service agreements – there's a All this has been done with an eye to expanding template that everyone can get access to, that then you beyond Scotland – an opportunity that the Water Bill can negotiate and tweak with the wholesaler to suit yourputs within reach. Says Powles: "We've been building selves. There's a regulated retail price – the maximum we our capabilities for five-and-a-half years – systems, procan charge. If you think what's happened in other markets cesses, innovations. Yes, we're focused on retention in with price volatility, we've had none of that in water so Scotland because that's what pays the bills and creates the customer is protected. And the codes that provide the the investment, but we've been doing it with one eye rules around it are quite simple to understand." on what we can do in other markets, whether that's in The one structural aspect Powles takes issue with is E ngland or elsewhere." developer services, which he feels would naturally sit He describes the incoming English market as "a game better as a wholesale activity. "That was the one area I changer". "I didn't come into this business to manage don't believe was designed with the customer in mind. decline. We've built a strong set of insights into what It's quite a clunky, bureaucratic process that we're workcustomers want, what locks in loyalty, whether they're ing quite hard to fix." He adds: "Personally, I didn't think price-led or services-led, and we're working hard to idendeveloper services should have been included in the tify those customers in England, because the characterd efinition of retail for England, but it has." istics are the same. We've got people based in England I ask Powles how the first five years as a retailer in now – starting small but we'll win business and build it Scotland have been. The early days, he says, were "a as we go along." little bit of a phoney war, in that the competitors didn't Powles clearly has a full strategy mapped out, but come in. But at that stage the English water industry was understandably won't tell me the details. But I think we trying to convince everybody competition was bad. It can expect to see Business Stream in the English market would have looked a little bit strange if they went and targeting specific types of customer – those it can serve got a licence in Scotland." best and get the best return from – while retaining its New entry started in earnest when the Water White universal service identity in Scotland. Paper was published, but it's really only been in the 10 | 6th - 12th December 2013 | UTILITY WEEK