How to prepare for the change in water law

By Liam Coleman

- Last updated on GMT

Water market open to competition from April 2017

Related tags Water Hotel Anglian water

There’s water, water everywhere in the pub, used for nigh on everything. At the same time, it’s something that’s not usually much thought about. It’s taken for granted that H2O is just there, on tap when needed. 

This is because at the moment, there isn’t really a lot to think about regarding water – we use it, we pay for it, we move on. Yet all of that will be changing from April 2017 as pubs in England will get the chance to choose their water supplier, in the same way as they choose a gas or electricity supplier.

What can we expect?

Any clues as to what should be expected in England come April can be found in Scotland. Scottish businesses have been free to choose their water supplier since 2008 and eight years down the line, businesses are starting to see significant savings.

In Scotland, small margins initially meant that price differentials were minimal. Yet Scottish businesses are now seeing discounts close to 25%, thanks to many years of competitive pricing, smoothing out of processes and increased efficiency.

How publicans can take advantage of the new law

"The best thing for publicans to do that will protect them in the open market is know exactly how much water they’re using now and how they pay for it." - Claire Yeates, Waterscan

"Having someone visit the site and review how you're using water is normally quite a cost-effective way to reduce consumption." - Peter Gaskell, Anglian Water

Claire Yeates, the director of water management company Waterscan​, has been keeping a close eye on the market and thinks that pubs will have to be innovative because of the low margins early on after the law changes.

“Water companies are not presenting a cost-saving opportunity to clients per se. They’re offering added value through consolidated billing, help with leak detection and regular meter readings,” she says.

An early deal

One water provider that has started to think ahead about how to innovate is Anglian Water​. It will be sourcing efficiency measuring devices, such as AMR (Automated Meter Reading), for customers and has a team dedicated to analysing water consumption.

One of the first tests for this water consumption analysis team has been luxury hotel company Hotel du Vin and Malmaison, which has 33 sites across the country. In July, Anglian Water announced it would be taking on the water management for these sites; estimating it could save the company £75,000 per year from April with its efficiency measures.

Anglian Water’s business account team manager, Peter Gaskell, oversaw the deal with Hotel du Vin and explains where the £75,000 of savings will come from. “We’ve installed data loggers on all their sites. We can log into the system and see exactly what they're consuming in 15-minute intervals.

“We can look at peaks in consumption or high use; it also allows us to benchmark the hotels against each other and against the industry standard, knowing what a hotel of a certain occupancy should consume.

“Our water data analysts do a dive into the data and pick out those hotels using more than they should be. We then send somebody to site to do a top-down review of all of their water consumption and identify opportunities to save on water.”

The same water but a different company

Hotel du Vin has sites up and down the country from Harrogate to Henley, so how does the deal with Anglian work?

Water provision will remain exactly the same as it has always been. Meaning that the hotel in Harrogate will still get its water from Yorkshire Water. The thing that has changed is the company performing the administrative functions. Information on all the water companies is being provided by Ofwat​.

“The water company as you know it geographically has had to separate their services. They’re legally separated, so the wholesaler provides the service and the retail does the front end of the billing and the customer service side,” says Waterscan’s Yeates.

Consolidated billing for multiple sites

Hotel du Vin is therefore in a situation where, come April, its head office will receive a single bill for all 33 sites from Anglian Water. Multiple-site operators in the pub industry would be in a similar position. Does this mean it will be beneficial for a pub operator based countrywide to opt for a solitary water provider?

Gaskell from Anglian Water confirms that “by combining all sites together into a consolidated bill delivered every month, we’re able to reduce administration charges”. However, there is no guarantee this will automatically be the best deal for every single site of a multiple operator because of geographical variations in distribution costs and standard rates per cubic metre of water.

What can be done before April?

Consolidated billing is not a benefit to single-site operators in terms of the change of law, but there is still plenty to be taken advantage of in the deregulated market.

Both from an economic and an environmental point of view, now is not the time to allow water bills to just wash over you and be the utility not thought about. Yeates believes that the bill is the key to seeing where money can be saved: “The best thing for publicans to do that will protect them in the open market is to know exactly how much water they’re using now and how they pay for it,” she says.

There are companies, including Waterscan, that will do a free review of water bills so publicans can find out about about their water usage ahead of time, with a view to saving money once the market opens. Armed with in-depth knowledge of the site’s water usage and billing, water retailers can be approached with a lot more confidence, and bills easier to compare, if the decision is taken to switch retailer.

On top of this, AMR devices for various budgets are not just provided by water companies. They can be bought by individual sites and installed on all devices that use water to measure where it is being lost and, therefore, where savings can be made straight away.

Things can go swimmingly

Water has always been everywhere in the pub, but never before has there been such an opportunity to save money on it. If steps are taken now to research water usage and what the various water retailers can offer in a specific situation, it can be plain sailing for publicans from April onwards.

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