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Water price rises averaging 9.6 per cent (excluding inflation) were introduced on 1 April 2005 as a result of regulator, OFWAT’s price determinations for the period to 2010, and prices will continue to rise over the next five years to fund investment in the industry’s infrastructure and environmental improvements.
Along with these rises comes the need for businesses, and water-intensive industries, to consider this often overlooked utility as part of their energy-management strategy. Companies will need to carefully assess the impact on their overall costs as a result of the changes.
It is a common misconception that, since there is not yet any facility to negotiate prices for water supply and wastewater treatment, there are no savings to be made on water. As a result companies are paying more than necessary to their suppliers, impacting on their profits.
Another issue is that energy management, including water, is normally just one small element of a person’s job remit. The root cause of why many businesses are paying over the odds on their water bills is a widespread lack of appreciation at just how much could be saved on their expenditure.
Through analysis of usage and water efficiency, our team identifies areas of overcharging and errors in billing, and makes recommendations on areas in which overall consumption of water can be reduced.
UK industry and commerce uses over four billion litres of water per day, and although companies manage other utilities such as electricity and gas to reduce costs, most continue to ignore water. However, we know that significant reductions can be made, as the savings we achieved recently for a client demonstrates.
A good example of how we can help manufacturers and other organisations is illustrated by the project we undertook with world-class aerospace solutions provider Marshall Aerospace of Cambridge (MCA). We slashed MCA’s water bill by a massive £22,000. It achieved this ongoing saving on MCA’s annual water spend of £81,000 following an in-depth analysis by its water division. Analysts also identified that there were discrepancies in the application of charges relating to MCA’s water use. By liaising with MCA’s supplier, our team ensured that the charges were amended and refunded on a retrospective basis. As a result, MCA received refund cheques totalling £46,000 in addition to an ongoing saving of 27 per cent per annum on its total water spend.
A spokesperson for MCA says: “We were keen to ensure that our water usage was as efficient as possible, but needed the expertise of McKinnon & Clarke could offer in order to evaluate it. Following the audit of our water usage, we were advised of the error in charges and were delighted to receive the sizable refund cheques. The ongoing saving is fantastic for us, we are delighted to have secured a saving of 27 per cent each year and couldn’t have asked for more.”
This new round of price rises needs to be addressed, as it will not only hit water-intensive industries. Those areas covered by Thames, Bristol, and Bournemouth & West Hampshire Water will see price rises as high as 15.9 per cent. With costs set to continue rising by an average of 25 per cent over the next five years, the question is, what are you going to do about it?
Those responsible for utilities management should be aware that the price rises could be offset, or even exceeded by savings generated through undertaking an audit and analysis of costs and consumption. VTR
Chris Davenport is international business manager of McKinnon & Clarke’s Water Division. For more information about how the price changes will affect your business, contact McKinnon & Clarke’s Water Division, on tel: 01383 745000, or visit the new website www.mckinnon-clarke.com
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