1. Water Retail Market Opening
LUPC Estates Workshop
TEC update on
Water Retail Market Opening
Steve Creighton – Head of Member Services

2. 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.

3. 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

4. What is Water Retail Market opening?
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.
Enabled by the Water Act 2014
Driven by DEFRA and regulated by OFWAT

5. Water market operates as a series of regional monopolies
Current state
Water market operates as a series of regional monopolies
Little incentive for suppliers to reduce costs or improve customer service
Customer satisfaction in water companies is generally high, although issues around billing exist (consolidation, EDI, over-reliance on estimated bills, lack of smart meter roll-out, etc)
Customers generally regard water as a simple service which requires little input from them

6. Current supplier map

7. Wholesalers are to remain a regional entity
Future state
Water supply companies to be split into distinct Wholesale and Retail businesses
Wholesalers are to remain a regional entity
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

8. 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

9. We are here

10. 15 water supply and/or sewerage licenses granted to date:

11. Wholesaler Retailer Bill Cost : 93% 7% Water treatment
Customer Services
Water quality
Billing
Storage
Meter reading/AMR
Asset ownership and management
Ancillary services
Infrastructure maintenance

12. 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.

13. 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

14. 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
Obtaining best price
Accurate billing/Less estimated readings
Ensuring compliance with procurement rules
Supply resilience
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

15. 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)

16. Water supply & sewerage services
water supply including emergency provisions
sewerage services including wastewater, trade effluent, roads and property drainage
metering
billing
data
customer service

17. 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

18. Preparing for the retail market
Desirable Data
unique property reference number
demand profile (i.e. 24/7, 9-5)
annual spend
Water reuse
Essential Data
organisation name
address including postcode
annual consumption
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

19. Code of Practice:
Water supply and/or sewerage licenses granted to date: