The Strategic Panel, the most senior industry group in the business water market, has today published its response to Ofwat’s consultation on their draft determinations for PR24.
The Panel highlighted there are positive elements in the draft determinations which could drive improved outcomes for business customers, the market and the environment. These include Ofwat’s expectation that wholesalers roll out all the smart meters in their business plans and the uplift in weighting of the new BR-MeX (business customer and retailer measure of experience) incentive.
However, because the business market accounts for c.30% of water used in England, the Panel is disappointed at the overall relative lack of prominence given to the market. The Panel believes there should be a standalone chapter on the business market in the Final Determinations.
The Panel also highlighted they would like to see the final determinations reflect the key asks in the National Metering Strategy for the non-household market published earlier this year. One of these is to ensure large meters used by high consuming customers and long unread meters are included in smart meter rollout programmes. The Panel questioned whether without these changes it will be possible to stay on track for Defra’s target to reduce non-household demand by 9% by 2038.
The response outlines the following key asks of Ofwat:
- Allowances for smart meter rollouts need to ensure more expensive large meters used by water-intensive businesses and long unread meters that may be more difficult to locate and access are included in rollout programmes
- The Panel question whether the business demand reductions outlined are achievable without appropriate mechanisms to deliver smart metering and non-household water efficiency
- More emphasis is needed around wholesaler-retailer collaboration on non-household water efficiency to enable businesses to realise the benefits of what greater collaboration could enable
- The Panel welcome strengthening of the weighting of the BR-MeX incentive but focus is needed on ensuring it drives wholesalers focus around data and efficiency
- The Panel would like clarity that bill increases are balanced fairly between household and non-household customers
The Panel also encouraged Ofwat to ensure the final determinations help deliver the draft Roadmap to a Flourishing Market recently consulted on. This set out a series of actions the Panel identified to enable the market to begin to deliver the customer outcomes envisaged when it opened. A final version of the roadmap is due to be published in September.
Commenting on the response, Strategic Panel Chair Trisha McAuley OBE said: “It feels like PR24 has come a long way since we fed back our disappointment that the draft methodology was largely silent on the importance of smart metering. With Ofwat now endorsing the encouraging number of smart meters included in wholesalers business plans, the priority now is ensuring businesses remain a core part of these rollout plans.
The ambition of the new performance commitment to reduce business demand by 7.5% by 2030 is also to be welcomed. Our message to Ofwat is it needs to be backed up with appropriate mechanisms to deliver non-household smart metering and water efficiency.
We look forward to working with Ofwat as we look to collectively deliver the actions in our roadmap to a flourishing market in order to deliver improved outcomes for current and future customers, market participants and the environment.”
The full response is available here. If you have any questions, please email
