Retail switching is just around the corner…
As of April 2017, the water and effluent market will change forever. Currently our customers are forced to obtain water/sewerage services based on the region upon which they are located. However, as of April 2017, these constraints will be lifted and customers will be able to switch suppliers just like they can with their gas/electricity supply at home.
What are the benefits?
A lot of our customers think costs will reduce enormously, however, this is a false pretence as the new supplier would still have to pay the wholesale cost of the service to the existing supplier. This is around 95% of the total cost with the retail portion (admin + profit) only accounting for c. 5%.
Any attempts to save money are constrained by this and reducing charges can only be achieved by:
- Reducing the level of service to lessen administration costs
- Reducing the profit margin
A national company with multiple UK sites can group together all individual sites into a single company bill which reduces administration charges.
If you are not a national company, then option b is the only choice for cost reduction and even then, you would only be looking at around 1% which hardly seems worth it!
If you are going to consider retail switching for your company, you would be better placed trying to negotiate an improved service, as financial savings are unlikely to be lucrative!Back