What is Business Water and How Does It Work?

If you start thinking about your business water the same way you would your business energy, you can potentially save yourself money, while finding a service better suited to your specific needs. Read below for more on switching your business water supplier.

Connor Campbell Last updated on 18 March 2022.
What is Business Water and How Does It Work?

As a small business owner, you’ll likely be familiar with shopping around for your electricity or gas. However, did you know that you can also do the same with your business water?

Since 2008 in Scotland, and 2017 in England, business water has switched from its previous regional structure to a competitive market, where businesses can pick and choose their supplier based on what is best for their needs.

Below we take a look at how business water works, who is eligible, and how you can switch your business water supplier.

» MORE: A quick guide to business energy in the UK

How does business water work?

Just as is the case with business electricity and gas, wholesalers maintain the network and sell water and wastewater services to retail suppliers, which then package these services and sell them on to customers.

In England, Open Water – the programme that changed the business water landscape – is run by the Water Services Regulation Authority (Ofwat), the Department for the Environment, Food and Rural Affairs (Defra), and the Market Operator (MOSL). In Scotland, the regulator is the Water Industry Commission for Scotland (WICS).

If your water supplier is based in Wales, you can only switch business water suppliers if your business uses more than 50 megalitres of water a year.

If you are based in Northern Ireland, your business water services will automatically be supplied by Northern Ireland Water (NI Water), and you will be unable to switch providers. You will need to notify NI Water, however, if you change from a domestic to non-domestic customer, or vice versa.

How to switch business water supplier

If your premises are primarily used for business purposes, and your existing supplier meets the location requirements mentioned above, then you should be eligible to switch your business water supplier.

When looking to switch business water suppliers, you should take into consideration the following:

  • the business water rates offered by each retailer
  • the quality of the customer service for each retailer
  • how the retailer can tailor your contract to suit your specific business needs
  • what services, such as water efficiency advice, the retailer offers alongside your supply
  • what services it provides for businesses spread across multiple premises, for example consolidated billing

The process itself is then pretty straightforward and follows many of the same steps as switching business energy.

  1. Work out the details of your current business water use, including your annual consumption and your supply point identification number (SPID).
  2. Look at the terms of your current contract, including whether you have different providers for water supply and wastewater removal.
  3. Compare the rates and tariffs offered by licensed water retailers to find the best fit for your business.
  4. Agree a deal with your chosen retailer. You can also try to negotiate a better contract with your existing retailer.
  5. Confirm your switch if that is what you have chosen to do. You will have a seven-day cooling-off period as the switch is being processed if you want to change your mind.

Business water rates explained

Most businesses will be charged for their water based on their meter readings, reflecting their volumetric usage. If your premise doesn’t have a meter, you will instead be charged a flat rate based on the value of your property.

In both cases, you will also need to pay a fixed standing charge. If you are metered, the cost of this charge will depend on the size of your meter. If you are unmetered, it will be a fixed amount dictated by your supplier.

There will also be metered and standing charges related to the removal of wastewater. This includes surface water, highways drainage, foul sewage and trade effluent. Effluent, or liquid waste, is water contaminated with things like fats, oils, grease, chemicals or food waste. The strength of your trade effluent will in part determine the cost of these charges.

You will be billed separately for wastewater removal if you use different water supply and wastewater retailers.

Other additional costs found on your business water bill can include disconnection and reconnection fees, and meter installation, repair or replacement charges.

How to make your business more water efficient

Similar to how you would carry out an energy audit to work out where you can cut down on your gas and electricity bills, a water audit can help you find how your business can reduce its usage and save money.

A water meter would be invaluable in this process. For example, if you are seeing your water usage, and therefore your bills, increase for no obvious business-related reason, you may have a leak.

You could even look into various water-saving devices, such as automatic sensor taps or a cistern reduction device.

If you are after something more thorough, you may want to consider hiring a specialist to carry out a comprehensive audit. This isn’t free, however, and may be better suited for larger businesses.

» COMPARE: Business energy with NerdWallet

Image source: Getty Images

About the author:

Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The Independent. Read more

If you have any feedback on this article please contact us at [email protected]