Justina Sarkanaite, Water Procurement Specialist at Optimised, dives into the importance of this element of utility procurement, and why businesses should consider this in their procurement strategy.

Water tends to flow under the radar as a utility, with merely a quarter of customers opting to switch providers since 2017. Many companies overlook their water expenditure, considering it negligible compared to energy costs. Moreover, with prices adjusting only annually, on 1^st April, there's less urgency to lock in contracts due to the minimal risk of fluctuating prices on a weekly basis.

Previously the increases used to be 2-5% per annum, however in recent years following the energy crisis and the fact that wholesalers themselves are large energy users, these April water price adjustments have increased substantially. The rates are closely regulated by regulator Ofwat and have now been approved for the 2024-25 year. This has resulted in an average increase of 6.1% for FY 2024-25. Significant regional variations exist in the rate changes, with increases varying between 5 and 15% per region. These are attributable to the investment plans of each individual water company, with some areas even seeing reductions in charges.