Currently, the English market is open to non domestic water users (not sewerage) who use more than 5,000m3 of water per year. In England the market will open fully, with no volumetric restrictions, to all non domestic users of water and sewerage by April 2017.
Unlike the Scottish market, water companies in England will not be forced to separate and sell their retail business. The in-area trading ban, which prevented water companies providing retail services within their area of supply, was lifted in 2013. This means that a retail business set up by a water company can offer water services to any non domestic business including those sites within its parent company area.
The industry in England is regulated by OFWAT (The Water Services Regulation Authority) who currently only set price limits for customers who use less than 5,000m3 (or 5 megalitres) of water a year. When the market opens in 2017, it is currently proposed that the rules on the wholesale price will be determined by OFWAT and it has been suggested that they will set the maximum (default) retail and wholesale price tariffs. All potential suppliers need to obtain a licence to trade from OFWAT before they can supply retail water to eligible customers.
What does this mean for your business? In simple terms, it should give you the opportunity to reduce the cost of your water and sewerage services, either through renegotiation with your existing supplier or by transferring to a new supplier. It also offers the opportunity for businesses to improve the quality and sustainability of their water supply, with the potential to reduce costs. Although the final implementation is yet to be determined in all its details, businesses in England need now to be considering their options and developing effective strategies, to ensure that they reap the benefits once the market is opened fully.