Moment of reckoning for Welsh water providers as Ofwat PR19 deadline passes 

Welsh water providers face a moment of reckoning now that Ofwat’s 2020/21 PR19 reporting deadline has passed. For the first time, suppliers could face fines if they underperform against Ofwat’s annual targets, with results set to be announced over the next few months.

One of the key targets set out by Ofwat was a reduction in the number of void sites – those classed as being ‘vacant’, but which are actually still being supplied water. Suppliers across the UK were set individual targets, with Hafren Dyfrdwy being told to reduce its total voids by 5.94% over the last 12 months up to 31 March, while Dwyr Cymru had to cut its number by 3.9%.

Void sites have a negative impact on customers because they mean suppliers aren’t being paid for services, and the entire customer base covers the cost of these losses as part of their bills. Covid-19 has taken its financial toll on many, and Wales faces the highest rates of poverty in the UK, meaning Hafren Dyfrdwy’s recent announcement that it is increasing prices by 5% in 2021/22 will be bad news for many.

Reducing void sites holds the key to cutting water bills for customers – as well as meeting Ofwat targets. To do this, water companies need to get smarter with customer data, according to Anita Dougall, CEO and Founding Partner of Sagacity, who works with ten of the UK’s water companies. She says:

“Water companies need to treat void sites as a priority, as they have a lot of customers who are perfectly capable of paying, but don’t, because they are not being billed. However, they have millions of customers, so establishing who is occupying a void site and not being billed presents a huge data challenge. Most water companies do not have the data maturity to handle this, which is understandable, as data is not their core business.

“To reduce the number of void sites, they need to clean up any ‘dirty data’ to ensure they have all the correct details for their customers, then go beyond their own books to enrich their data using third party capabilities. This will highlight which of their void sites are showing signs of occupancy – for example, by cross checking electoral records, or even bank or phone account registrations, as well as identifying customers that should be put onto a social tariff. They must then use analytics to match these records accurately, before creating a process for contacting and onboarding customers or assigning them to the right tariffs. It’s no mean feat and it will take time, but from now on they face the prospect of Ofwat fines for underperformance, so water companies need to act now.”