Water costs for companies rise

Although it may seem like a distant memory after last summer’s rain and winter snow, it’s been less than a year since many UK water companies imposed hose bans and warned of long-term water shortages. To cope with the increasing unpredictability of our rainfall, significant (albeit belated) investment is being made in the UK’s water infrastructure which is feeding higher bills for businesses and consumers.

Unlike energy, however, deregulation of the water industry did not introduce competition into the water market, leaving regional providers with local monopolies over water and sewerage services. And while water costs may not be exposed to the same price volatility as energy, this doesn’t mean commercial users can’t proactively manage their water usage and costs, reducing both consumption and costs. through detailed information. rate and volume analysis.

Don’t overpay!

The first step should be to make sure you are not overpaying for your supplies. Water and sewerage costs in the UK are determined by set fee structures, which precludes the opportunity for users to negotiate directly with their provider. These fees, generally published on April 1 and lasting for 12 months, are becoming increasingly complex, however, they are often made up of the following separate charges:

• Water supply

• Permanent charge of the water meter

• Dirty Sewer Removal Costs

• Permanent load of dirty sewage

• Surface water drainage charges based on cadastral or surface value

• road drainage loads

• Commercial Effluent Loads

Therefore, a priority in managing your water costs is to understand the volumes of water and sewer currently being purchased, comparing these volumes to all available rates from your water company. This process ensures that the the correct charges are being applied based on their actual use, identifying both cost saving opportunities in the future and refunds for any historical excesses.

As water volumes and rate structures change, this review should be done annually to ensure you continue to pay the right price.

Rate analysis also helps build a profile of your Operational use of water and sewing.identifying additional savings opportunities, often from commercial effluent and sewer fees, as well as meter sizing.

For example, a site currently used for storage may have previously been home to a water-intensive manufacturing industry that produced large volumes of commercial effluents and generated significant costs. The change of use to storage should mean that the size of the water meter (inlet) can be reduced and charges for commercial effluent reduced, leading to immediate and long-term cost reductions, but only if the new use is evaluated and identified. inform the water company.

Reduce water consumption

Having ensured that you are paying the correct rates for water and sewerage, the next step in managing your water costs is to reduce the volume consumed through the waste disposal and introduction of new technologies.

Only by understanding your current water and sewer volumes can you begin to eliminate waste, which is most easily done by comparing volumes with similar facilities within your own organization or with other businesses.

Benchmarking is usually based on understanding the factors that drive consumption, for example, the number of people using a building or the type of manufacturing process (for example, bread or concrete). Analysis of usage data against similar facilities can quickly identify anomalies, directing an on-site inspection to identify the specific causes of waste (eg, broken pipes, old/inefficient equipment) and what needs to be done to achieve savings .

This analysis can also assess potential savings if waste reduction measures are introduced, identifying the likely payback period for any investment and prioritizing activities.

The introduction of water saving technologies should also be evaluated, including low-flush toilets and faucets with automatic sensors, rainwater harvesting, and greywater recycling. These solutions typically have fast payback periods, qualify for Enhanced Capital Allowances tax relief, are generally easy to install, and can also reduce energy bills due to reduced hot water demand.

A proactive approach to water management through rate analysis, waste elimination and the application of new technology ensures that your cost base is kept in check, freeing up cash flow and improving margins.