Water market deregulation

16th February 2017 | Commercial Energy

The water market in England is deregulating on 1 April 2017. This will give businesses the chance to tap into savings and other opportunities. Businesses, charities and public sector organisations will be allowed to shop around and switch retail service provider.

Until now, only non-domestic customers in Scotland and very high users in England and Wales (over 50ML a year) could switch water and wastewater supplier. Anybody else who was unhappy with the service could only complain.

This will change from 1 April 2017 when the market opens for competition in England. It means about 1.2 million customers will be able to pick retail providers based on customer service, different packages and rates being offers. Wales is not deregulating.

Water Market Deregulation

There are some lessons from the Scottish situation. It deregulated in 2008 (the first in the world to do so).  Customers have seen benefits including savings in water charges, fewer CO2 emissions, water efficiencies and better monitoring of water use.

When the English market deregulates, the margins will be small at first.  This is because the wholesale price of water is artificially inflated by the country’s 14 water companies. There will be advantages, however, such as single billing for multiple sites. Bigger savings will begin in 2020, as they did in Scotland, when industry watchdog Ofwat will force the wholesale price down and rebalance the market.

The situation is complicated by some of the 14 water companies deciding not to enter the retail market. This will leave their customers high and dry. Others are doing the retail route, changing their business name at the same time. Others are undecided.

There is potential for business customers to save money, reduce admin and simplify their lives. However, water market deregulating has not been marketed widely as yet.  We anticipate a similar level of inertia from companies who do not look at their other utility supply arrangements.

More information available on the website below