Energy sector crisis – what next for water?

There continues to be extensive debate about the current state of the UK’s energy sector and the turbulent time ahead for many of the energy companies and their customers.

Over and above anything, our thoughts continue to go out to anyone who is personally affected.

We too have seen natural uncertainty in our own people about how things are going to play out over the coming months and my colleague Ben Jones, a (young) veteran of the energy sector, also wrote a great article linked to the crisis as well as commenting in the national media. If you missed Ben’s blog, you can find it here.

However, the energy market situation and Ben’s widely-welcomed commentary got me thinking about just how many households are likely to feel the pinch. We are seeing energy bills rising and so many failures are still to be absorbed into customer bills going forward, not forgetting those directly impacted by the Supplier of Last Resort process.

So, does what is happening in the energy sector have a large bearing on the water sector in the short and medium term? Firstly, on customers and secondly, on the potential for long-lasting competition in the household water sector?

The first noticeable impact is likely to be in the pocket of consumers who were once described as “just about managing” – those who have little money to spare and have no reserves to fall back on when things get tough.

Quite rightly, household water supplies cannot be disconnected for debt but they are also not a priority bill, so this means they often get put to the back of the queue by those people who are financially struggling. It’s simple economics – as households continue to use their water supply, so the debt continues to grow.

Whilst water companies are admirably supporting financially vulnerable customers – and for those of you who managed to hear Nina White of Thames Water and Michelle Atkinson of United Utilities at the Utility Week Consumer Vulnerability and Debt conference last month –  you will appreciate how much amazing support water companies already offer.

But fast forward to April 2022 and the government’s National Insurance increases will eat into the tight budgets and place some families at breaking point.

What I do know from my experience in the industry is that water companies work tirelessly putting clean water into the system and taking the less pleasant stuff away. The value for money for this service is mind-blowing – at an average of around a £1 per day.

However, even at this ‘low cost’ there will be families feeling the pressure. Whilst the issues may not have hit the sector yet, I hope there is lots of planning and forethought going into how more customers can be supported without additional pressure being added.

Also at the Utility Week conference, my colleague David Murphy talked passionately about our service Reach:Out, and how it’s already been adopted by some companies in the water sector as a way to re-engage customers, share support that is available, and ultimately help them to find a pathway to financial stability. You can find out more about Reach:Out here and it is these types of projects which in the long-term will make a real and lasting difference. This is just a snapshot of my thoughts but more than anything, I hope that lessons are being learned from the current energy crisis and that proper planning will help the water industry stay strong and competitive for customers.