Utility Week

24 | 8TH - 14TH DECEMBER 2017 | UTILITY WEEK Customers Analysis T he water retail market has now been open for just over eight months, and participants' views on whether or not it has so far been a success are mixed, to say the least. There are those who lament the loss of the old market, condemning retailers for offering a level of service to customers that is "worse than that previously offered by wholesalers". And there are those who fiercely defend the market and insist everything is going fan- tastically well. Then there are those who are slightly more speculative, suggesting it is too soon to tell, and that the market should be given a chance to really get going. Switching has been on a steady – if some- what stunted – upward trajectory since the market opened. The total number of switches currently stands at just over 71,000. Switch- ing rates should start to pick up as the mar- ket gains momentum, as happened in the Scottish market. However, there are things market participants can, and are, doing to speed up the process. Namely, they can try to raise awareness among customers of the ben- efits, above discounts on their bill – which are likely to be miniscule in the short term. While it is unfair to say the market has been a "damp squib" – as predicted by cer- tain participants before it opened – no-one can dispute that there have been teething issues, which need to be sorted out quickly. Here are some of the issues and develop- ments we've seen over the past eight months. Billing errors rife in the market Billing errors have plagued the market. A recent snap survey, conducted by Utility Week's sister title Water.Retail, found billing errors to be the area of greatest concern to market players. An overwhelming majority of respondents to the survey (75 per cent) said billing is the most important service retailers offer to customers, and for 33 per cent, bill- ing errors were their biggest concern. One respondent said it takes a "long time" to get gap sites and SPIDs (supply point identification numbers) correctly loaded due to "lack of knowledge on the retailer side", and one said that "virtually all retailers" had so far provided "appalling billing and customer service standards", labelling this "utterly woeful". A previous Water.Retail investigation found that data issues were still proving a headache for market participants, because widespread issues with completeness and accuracy of data in the open market "are not improving". A spokesperson for new entrant Clear Business Water said data quality "has always been a vital component of a success- ful competitive market". This will be an area of great focus for retailers in the short term. See graph, "Areas of greatest concern in the retail market". Are SMEs being well-served? In an early issue of Water.Retail, Lord Rupert Redesdale, chief executive of The Water Retail Company, warned that small and medium-sized enterprise (SME) customers were in danger of being "ignored totally" in the new market. Despite this, awareness of the market among SMEs appears to be on the rise, with the latest Consumer Council for Water (CCWater) figures showing 43 per cent of the companies in that segment are now aware they can choose their water retailer. However, 39 per cent of the SMEs who said they were unlikely to switch or negoti- Water.Retail market watch Eight months after the opening of the retail water market for non- domestic customers, participants' opinions on whether the market has been a success vary widely. Lois Vallely reports. Billing errors 33% Tight retail margin 13% Wholesaler performance 13% Operational teething issues 4% Market undermined 12% Lack of innovation 4% Non-payment 4% Poor service to SMEs 17% AREAS OF GREATEST CONCERN IN THE RETAIL MARKET Source: Water.Retail Source: MOSL My organisation doesn't use much water so I wouldn't save enough money I'm satisfied with the price I pay my existing service provider I'm satisfied with the service I receive from my existing service provider The savings on offer in the water market won't be worth the effort I don't have enough time to look into switching Other operating costs at my organisation are a higher priority The switching process will be too much hassle I'd prefer to stay with my existing provider because I'm familiar with them I'd need to find out more about prospective service providers before switching I'd need help under- standing the water market 20,000 10,000 0 10,000 REASONS SMEs WILL NOT ENGAGE WITH THE MARKET Source: CCWater SWITCHES TO AND FROM THE MOST ACTIVE RETAILERS 39% 22% 15% 15% 11% 11% 11% 11% 5% 7% Note: Gains and losses logged against Severn Trent Water have been shown against Water Plus. Severn Trent Water intends to exit the market. Three Sixty Water has switched seven supply points. Water Plus Castle Water Anglian Water Business NWG Business Business Stream Water2business Pennon Water Services Affinity for Business SSWB SES Business Water Everflow Clear Business Water The Water Retail Company Pod53 Regent Water ADSM Water Choice South East Three Sixty Water Waterscan Veolia Water Retail Water loss Sewerage loss Water gain Sewerage gain

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