Senior figures in the non-household water sector have called for metering to be prioritised at the next price review and emphasised the need for co-ordination between water companies’ plans in this area.
In its response to Ofwat’s PR24 draft framework, the Strategic Panel, which is formed of members from the non-domestic water market including participants, regulators and watchdog CCW, said the current plan overlooked business customers.
“We are concerned there is insufficient focus on the NHH market in PR24, including the cost and complexity of operating within it and the structural changes that may be required to fix it in areas such as metering and data quality – which remain fundamental issues,” the panel’s members said.
The response said Ofwat should be explicit in the role the market can play, for example through using consumption data to manage supply and demand better. The response said “lack of coordination of water companies’ metering plans” will make investment decisions difficult for business customers who may want to invest in smart metering and could significantly reduce water demand.
To ensure the best outcomes for customers and the environment, the response said “fundamental change” was needed and called on Ofwat as the architect of the market to address these issues.
The panel stressed that the retail sector could play a significant role in addressing the framework’s core themes of climate change, affordability and growing consumer and regulatory expectations in the wider water sector.
It asked Ofwat to look more holistically at the role of the non-household market as part of a whole system approach when considering water consumption and resource availability. It also called for more on grey water usage, total catchment management and sustainable drainage, not just water efficiency.
The Retail Exit Code (REC), which dictates requirements for price and non-price terms in tariffs is currently under review by Ofwat, with a consultation running to mid-October. The review will address margins and the returns that retailers can earn. The panel underlined that the REC review was the appropriate place to address margins rather than the PR24 framework.