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  • by Karma Loveday

Retailer Wholesaler Group backs water efficiency levy for business customers

The Retailer Wholesaler Group’s Water Efficiency Subgroup (WES) has issued its recommendations for changes to the regulatory framework to bolster water efficiency in the business market, following the findings of a research report commissioned from Economic Insight.

The group largely endorsed Economic Insight’s conclusion that a water efficiency levy (which would be applied to customer bills in the same way as environmental levies in the energy sector) is the most attractive option, “in that it would act not only to directly raise the funding (estimated at £22m-£35m a year) but have the secondary impact of directly raising customer awareness by virtue of its application on bills, something not achieved by more traditional methods”. The group said this resource could be accessible to wholesalers, retailers, customers and third party intermediaries. It noted that a more detailed mechanism for the imposition, control and distribution of this funding will be required.

It further noted: “It must be recognised that any increase to price whether that be through levy or otherwise will increase the burden on the customer and in turn the risk of default. We must ensure that any increase in costs is comprehensively analysed to provide true value to both the non-household market and ultimately the customer on an enduring basis.”

While Economic Insight advocated a wholesaler-led strategy with the door left open for a more retailer-led approach in the long term, the WES said: “The challenge we face will be to find a balance that gives retailers access to the water efficiency funding and opportunities to support their customers to foster growth in this area, and reward those already delivering, but does not prevent wholesalers meeting their water efficiency performance commitments. We are again aligned that retailers must work with wholesalers in the delivery of water efficiency, but must not be allowed to act as a barrier to the delivery of the underlying requirements.”

It added: “Decisions made during PR24 in relation to smart metering will be critical to the ability of wholesalers/retailers to deliver against water efficiency targets.”


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