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Retailers and wholesalers – Who does what in the open water market?
In our last blog post, Pete wrote about the arrival of competition and how small businesses could benefit from the opening of the non-household water market. This time, I will explain how the market works, as well as the roles that both retailers and wholesalers play.
Before the market opened, there was no distinction between retailers and wholesalers. Businesses were supplied by their regional suppliers, just as households still are. As a result of the open market, regional suppliers had to decide whether they would offer retail services. Those that decided they would had to separate their retail and wholesale functions in order to allow fair competition. Those that decided they wouldn’t, had to find a retailer to take on their business customers ready for the arrival of competition. So we now have retailers (like us, Anglian Water Business) and wholesalers (companies like Anglian Water Services).
In order to prepare for a competitive market, regional suppliers had the following choices:
- Exit the water retail market and sell their customer base to a retail company within their group and transfer businesses over to that company from the wholesaler. This is what Anglian Water Group did in creating us, Anglian Water Business.
- Exit the water retail market and sell their customers to a completely unrelated retailer. Thames Water did this by selling their business customers to a new market entrant in England, Castle Water.
- Remain as a vertically integrated incumbent (existing) supplier, but separate retail and wholesale divisions and put tools in place to ensure a level playing field. Yorkshire Water adopted this strategy.
This explains why many of you will have received letters from your new retailer and old regional supplier (now the wholesaler) explaining what was going to happen. This included changes to account numbers and direct debits, a necessary but inconvenient consequence of the retailer/wholesaler separation. It may have been confusing at the time, but it was done to encourage competition to ultimately benefit the business customer – so thanks for being so patient!
So what are retailers and wholesalers responsible for? What’s the difference?
Well, let’s start with the wholesalers. They provide water to the customer through the same pipes and networks as before, but they no longer perform any customer-facing activities. Instead, they charge a wholesale rate for supply to the retailers and the retailers add their margin on top in exchange for looking after and billing the customer. The wholesale rate is the same for all retailers.
Wholesalers are also responsible for the maintenance of the water and wastewater networks within their region. This includes the sourcing, treatment and transportation of water, as well as the collection and treatment of wastewater. So if there’s a leak on your street or at a location near your premises, get in touch with your wholesaler and they will come to make repairs.
Next up, retailers, what are we responsible for?
Some retailers just take care of customer service and billing. But that doesn’t need to be everything they do and at Anglian Water Business we provide a lot more. Helping customers become more efficient by providing value added services, such as High Consumption Alerts, Active Water Management®, smart metering or Leakage Find & Fix is at the heart of what we do. We want to help small businesses save water and cut bills in the long term by helping them understand how they use water and where to cut waste.
It’s important to note that if you have a leak on your property, you will be liable for the cost of repairs and should contact your retailer immediately. We can help you deal with a leak before it becomes costly. We’ll monitor your usage and will compare your meter reading against previous usage. If we notice an unusual spike in consumption, we’ll contact you and let you know. This High Consumption Alerts service is free and available to all of our customers.
Water may not be highly visible within your business, but it is often vital to your operations and bottom line. We believe that selecting a retailer that understands this and understands how to look after your needs, is a very important business decision.
I hope this blog post has been informative and that it’s been able to provide some clarity on the new open water market, but if you have questions or would like to switch to us, then just give us a call on 03450 704158.