LUPC Estates Workshop
TEC update on
Water Retail Market Opening
Steve Creighton – Head of Member Services
[email protected]
07415 950629
TEC at a glance
• A “Not for Profit” Public Sector Buying Organisation (PBO)
• Formed by Universities as an off-shoot of AUDE
• Owned and governed by our members
• Guarantee compliance
• Guarantee collaboration
• Delivers Cabinet Office ERG ‘Recommended Solutions’
• Frameworks deliver short, medium and long term energy risk
management
• Frameworks include ‘sleeving’ and power purchase agreements –
can take energy from any source and deliver it to any member.
TEC
in numbers
164 University &
College Members
1.3TWh of
Electricity
£189,722,722 Member’s
Spend on Utilities
1.7TWh of Gas
14 FTE’S
95 Years Experience
in Energy
What is Water Retail
Market opening?
Enabled
by the
Water Act
2014
Water Retail Market
opens in April 2017
Provides choice for non
residential customers on
who they want their water
and waste water retail
supplies from.
Driven by
DEFRA and
regulated
by OFWAT
Water market operates as a
series of regional monopolies
Little incentive for suppliers to
reduce costs or improve
customer service
Current state
Customer satisfaction in water
companies is generally high,
although issues around billing
exist (consolidation, EDI, overreliance on estimated bills, lack
of smart meter roll-out, etc)
Customers generally regard
water as a simple service which
requires little input from them
Current supplier map
Water supply companies to
be split into distinct
Wholesale and Retail
businesses
Wholesalers are to remain a
regional entity
Future state
Retailers can operate
anywhere in England and
can potentially work with
any Wholesaler
Water supply, waste water
services and ancillary
services can all be arranged
through different Retailers
The shape of things to come
•
Customers will have direct relationships with Retailers only
•
Market already beginning to change shape
•
United Utilities/Severn Trent = Water Plus
•
Kelda/Yorkshire Water = ThreeSixty
•
Anglian Water reported as “likely to rebrand” their retail arm
•
Thames Water not entering as a retailer, transferred all business retail
accounts to Castle Water
•
Retailers must also have an access agreement in place with wholesalers in order
to supply their water to customers
•
Retailers must be licensed by Ofwat
We are here
15 water supply and/or sewerage licenses
granted to date:
Retailer
Wholesaler
Bill Cost :
Water treatment
Water quality
Storage
Asset ownership and management
Infrastructure maintenance
93%
7%
Customer Services
Billing
Meter reading/AMR
Ancillary services
What does this mean for you?
• Public Sector has to demonstrate a compliant procurement process under public
procurement rules.
• As only the Retailer element is open to price competition (around 7% of the bill
total) then don’t expect massive price savings.
• Opportunity for further savings through water efficiency measures.
• Opportunity for further savings as the market matures – Ofwat to conduct a price
review in 2019 (PR19), could open up more flexibility to pricing options.
What have we been doing?
• Issued questionnaire to gather information on priorities and attitudes to switching.
Questionnaire received 185 responses
• Working in partnership with Public Buying Organisations to provide a joint compliant
framework
• Meetings with water companies to better understand their businesses, offerings and
appetite for the new market
• Regular meetings with DEFRA, OFWAT and MOSL to understand how they will
regulate the market and manage the meter data
Customer survey results
• Responses from 185 organisations
• Majority from Local Authorities (46%) and Universities (16%)
• 99% would use a framework if available
• Top 5 quality criteria
1. Obtaining best price
2. Accurate billing/Less estimated readings
3. Ensuring compliance with procurement rules
4. Supply resilience
5. Customer Service
• Majority preference for pricing to be higher ranked (60-70%)
• Majority preference for: 3+1years for framework duration
• 89% would like access to independent ancillary service providers with the option
for a shared savings approach
Procurement
• OJEU – November 2016
• Evaluation January/February 2017 (ITT closed 17th January 2017)
• Contract award: March 2017
• e-Auction: May/June 2017 (anticipated)
• Lotting
• Water and Waste Water
• Ancillary services
• One stop shop (1 & 2 combined)
Water supply & sewerage services
• water supply including emergency provisions
• sewerage services including wastewater, trade effluent, roads and
property drainage
• metering
• billing
• data
• customer service
Ancillary services
• automated meter reading goods and services
• water audit
• water footprint
•
•
•
•
•
•
leak detection and repair
cost/spend recovery
bill validation
benchmarking
tariff optimisation
legionella services
Preparing for the retail market
Essential Data
Desirable Data

organisation name

unique property reference number

address including postcode

demand profile (i.e. 24/7, 9-5)

annual consumption

annual spend

supply point ID (SPID) - this is a unique
reference number for your meter

contact name at the premises

contact phone number at the premises
•
Water reuse
•
Water reuse
Code of Practice:
http://www.ofwat.gov.uk/customer-protection-finalcode-practice-non-household-retailers/
Water supply and/or sewerage licenses granted to
date:
http://www.ofwat.gov.uk/regulatedcompanies/licences/