From April 2023, businesses can expect to see a significant increase in wholesale water costs.
in this blog, we will tell you everything you need to know and how you can minimise the impact of an increase in business water costs.
Are you aware of the significant increase in wholesale water costs that businesses are going to face from April 2023? The water companies that operate water infrastructure have seen their costs rise, resulting in a considerable increase in business water rates. According to the estimates, the average increase in business water rates will be around 14.4% in April 2023, with variations depending on the region.
In addition to the wholesale water price increase, the regulator, Ofwat, has reassessed its default price cap calculation, resulting in a 30% increase in the retail rates charged by business water suppliers. This change will increase overall water bills by an additional 6.4% before inflation.
What Does This Mean for Your Business?
The increase in wholesale water costs and default water rates will significantly impact businesses’ budgets that are already struggling due to high energy costs. To mitigate these increases, businesses must take proactive measures to reduce their water costs and consumption.
Why are the Increases So Significant This Year?
There are two main drivers behind the substantial increase in wholesale water costs in 2023. Firstly, the rate of inflation has risen to a 40-year high, which has increased the costs incurred by water companies to operate, as well as the cost of putting water infrastructure in place.
Secondly, the rate of default water rates that businesses must pay has also increased. Ofwat reassessed the calculation of their default price cap, resulting in an increase in the retail rates charged.
Expert Tips to Help Businesses Reduce Costs and Consumption
- Review Water Contracts with our Utility Health Check: The water market was deregulated in 2017, allowing businesses to choose who they purchase their water from. This increased competition in pricing and service, making it possible for businesses to save up to 25% by simply switching suppliers. Our experts can guide you through the water procurement process, helping you explore options that result in paying less for your water and wastewater.
- Conduct a Water Audit: Regular water audits can help determine if your business is using the correct amount of water. On average, water audits can save you around 10-15% on your bill. Our audits involve analysing your invoices and charges, identifying sites that would benefit from further on-site investigation, producing a detailed report with cost-saving opportunities, implementing agreed-upon actions, and securing benefits. You may even receive refunds due to overpayments.
- Act Quickly to Ensure Your Business Takes Advantage of Savings: With the increase effective from 1st April 2023, businesses need to act fast to review water contracts and take advantage of the available savings.
- Get Expert Support to Reduce Water Costs: Our water experts have the knowledge, tools, and experience to help you mitigate the increasing wholesale water costs. We can offer your business a multitude of solutions to suit your business needs.
How can we support your business?
Contact us today to learn more about our water procurement services and how our experts can help you reduce your business water costs and consumption. Act fast to mitigate the impact of the upcoming significant wholesale water price increase in April 2023.
