Tom Melhuish 5 min read

Annual changes to business water charges

What are the annual changes to business water charges? On 1 April each year, the price that British businesses pay for their water supply will change. Here is our guide to what this means for your business water charges and why this price change is happening.

Underlying wholesale rates – The annual change in the price of water

The annual change in the price of water and wastewater starts with a change in the underlying wholesale cost of water. Simply put, your water supplier purchases water from a regional wholesaler, adds additional charges for their customer services, then bills the supply of water to your business.

On 1 April, Ofwat – the regulator, agrees to changes in the regional wholesale rate. This change reflects the increasing underlying cost of managing the local water network. With climate change and increasing population, these costs go up each year.

The business water suppliers will pass on any increases in the underlying wholesale costs to their customers. The size of these price increases varies from region to region.

The retail fee

The British business water market is deregulated, meaning that suppliers of water can each determine the rate that is charged to their customers, allowing them to keep higher business water charges.

On 1 April each year, suppliers will use the wholesale price change as an opportunity to reassess their additional charges to business customers. This charge is known as the retail fee and is levied by the supplier for the customer services and billing that they provide to their business customers.

The difference between the wholesale rate for water and the volumetric rate your business is charged depends on your business’ water supplier. Fortunately, deregulation means that your business can choose who supplies its water and wastewater services.

How can I compare water rates for my business?

Since the deregulation of the business water market, each time the annual price change occurs, the differences in prices between suppliers get bigger. This means the opportunity for your business to pay less for its water also increases.

AquaSwitch allows a quick and easy comparison of quotes from different licensed suppliers across the market. If you decide that a new supplier can offer you cheaper rates and improved customer service, then AquaSwitch provides a hassle-free switching service between suppliers. Find out more in our comprehensive guide to switching your business water supplier.