Retail Competition in the Water Industry
The competitive environment in the water industry in England and Wales is changing due to the challenges facing Water Companies in the future:
- Climate change;
- Population growth;
- Water consumption;
- Customer expectations;
- Continued efficiency;
- Environmental obligations and
- Resource Management.
There are a number of reasons for pursuing retail competition:
− Customers want choice Meeting customers’ expectations is important if charges are to be seen to be legitimate.
− Role of retailers: Retailers can maximise customer benefit by championing the customers’ interest.
− Efficiency: Where Water Companies are performing comparatively; efficiency needs to be driven due to Climate change, Population growth, Water consumption etc.
Retail competition was introduced in December 2005, through the Water Supply Licensing (WSL) regime (for water only). This is through third party access to facilitate new entrants to compete and provide certain water services. There are two types of WSL:
− Retail licence (purchase water only from Water Company and sell it on to eligible customers).
− Combined licence (develops its own water source, introduce it into the Water Companies water supply system and sell it to eligible customers).
Eligibility - for Non-household customer using at least 5 mega litres of water per year (Ml/ year) at a single premise have been able to choose which company supplies their water services.
To facilitate the WSL process, a number of documents have been created, in accordance with the Water Act 2003 and in compliance with Ofwat’s guidance, which can be found below:
Network Access Code which contains the Non-Disclosure Agreement, Common Contract and Data Sheet.
Compliance Code to comply with Licence Condition R. This code sets out how we will manage our dealings with competitors to comply with our legal and regulatory obligations.
Historically, water companies have been able to offer water and water recycling services to large industrial or commercial customers and developers of greenfield sites outside their regional boundaries through the creation of what are known as ‘inset appointments’. The company is responsible for customer service, billing and the maintenance of its supply network.
An Inset Appointee is an entrant who can provide these services to a specific area (e.g.: Housing development) in place of a Water Company or in the absence of a provider.
For further information on WSL or Insets please contact:
Wholesale Commercial Manager
Severn Trent Centre
2 St John’s Street,
If you would like to comment on any aspect of the document or its development, just email us your feedback.