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  • Dean Pattison

Property Investment Tips - Utility Quotations.....


Did you know.....


Quotation Timescales……


We are often contacted by developers and investors asking if we can produce a utility quotation. We advise them of the detail needed to produce something which is accurate and commit to collating a proposal. Some of these developers then contact us the following day asking if the quotes are ready.


When this happens it is often the case that their development is quite far progressed and they need utilities installing quickly. Unfortunately, the industry doesn’t work this way and often we need more time.


We can of course produce an estimate but in general, an estimate can only be used for budgeting purposes and usually consists of caveats to protect an installer from all of the site conditions which are unknown. For an accurate proposal, a quotation must be produced and each utility deals with things slightly differently. This means that the developer or investor will experience a different process every time.


Examples:


Gas


Gas is recognised as the most progressed industry in terms of competition. Cadent Gas will produce a quotation for a one-off gas service within 24 hours. Independent Utility Infrastructure Providers are usually equipped with experienced and qualified design engineers who can produce a quotation within a week at worst case.


Electric


For a one off service to a new property, a Distribution Network Operator such as Northern Powergrid, Western Power or UK Power Networks will produce a quotation within 5 working days.


Where a main and a service is required it can take up to 25 working days and sometimes even longer if high voltage cables are a factor.


Whilst there are also independent options within the Competition in Connections criteria, contractors tend to choose the opportunities wisely and they will confirm at an early stage if they cannot find themselves to be competitive.


Water


We have a trusted WIRS registered contractor who can quote overnight however there is an extended self lay process which involves applications to the incumbent network operator. Such applications will take approximately one month which will determine a connection point for the contractor to produce a meaningful proposal.


If we were to use Yorkshire Water as an example, a direct application for a one-off water service to a new property will take a minimum of one month. If that timeframe, they will send a surveyor to site to determine the detail of the quote to be issued.


There are therefore several ways of collating utility proposals and these are produced against differing timescales. These timescales are implemented as a result of either regulation or internal key performance indicators. It would not be surprising to see some of these timescales fail during busy periods and this can sometimes extend the time frames further.


Costs


Also note that quotations are not always free of charge.

Distribution Network Operators (Electric) have the opportunity to apply Connections Expenses. These are published costs which represent the internal cost of producing a design and quotation.


The value of the connection expense is dependant on the category of works. For example, if we were to apply to Northern Powergrid for a one-off service to a house, their internal processes and systems are set up in a way that they determine that there is no charge for the quote. If however, you need a quote for a main and five services, there would be an applicable fee of £660 plus vat to produce the quotation, complete some modelling and produce an associated design.


In our experience, not all network operators apply the charging methodology in the same way. What you are charged in Yorkshire may be very different from the charges applied by UK Power Networks or Western Power for example.


There is also usually a charge for a water or drainage application. These can be up to a couple of hundred pounds.


Gas quotes don’t normally incur a cost via an independent contractor however when trying to use Cadent Gas, there may be charges applied to quotes for commercial premises for example.


Our advice to developers and investors is as follows:


  • Give yourself at least one month to collate your utility quotations.

  • Understand that there are times when lead times can be extended and always ask for a quotation commitment date.

  • Keep an eye out for emails from the provider. Sometimes they ask for additional information by email and your job will be on hold until it is submitted.

  • Ask if there are application fees and understand the extent of them. If you are looking to purchase a piece of land you should be able to obtain an estimate rather than paying a fee.

  • Ensure that you are certain of your scope of works before you allow providers to produce a quote. If there is a change later on, the companies which charge fees wont just alter the quote, they will charge you again.

  • Keep an eye on expiry dates. Gas validity periods range from 30-60 days. Electric are usually 1-3 months and water can be valid for a good twelve months.


The industry is a minefield with opportunities to prepare your utility proposals in different ways. Building an understanding is an essential part of your utilities journey. If in doubt, give Utility Source a shout!