Industrial water retail

Water market deregulation for industrial customers

•   Learn how the water market is changing and the options you have

•   Identify areas for potential cost savings

•   Make informed decisions based on impartial advice

The Scottish retail water market opened to all non domestic customers in 2008. In April 2017, the English water market will follow suite and will enable companies (non-domestic water users) of all sizes to choose their water supplier. As a licensed provider in Scotland, we can offer advice on these changes and what options are available for your site.

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Scotland

The retail water market opened in Scotland to all non domestic customers in 2008. This gave all non domestic customers the option to choose their water and sewerage services supplier. There is no volume limit so any non domestic customer has the choice to move supplier.

Scottish Water continue to operate and maintain the reservoirs, treatment works, pumping stations and distribution network and therefore the source and quality of water delivered at the tap remains unchanged. Customer services including meter reading and billing are now the responsibility of the new service suppliers or licenced retailers. Scottish Water sells water and waste water services to these new licenced retailers at a wholesale price, the retailers can then offer various retail packages to customers. The Water Industry Commission for Scotland (WICS) sets the Wholesale charge and also the maximum, or default retail price which the retailer can charge to customers. Any new retailer entering the market must obtain a licence from WICS for both water and waste water services.

There are a number of suppliers in the Scottish market place, all offering different retail packages, but each is based primarily upon a core requirement of meter readings and billing as well as being the point of contact for water supply issues.

England

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.

Wales

The Welsh market is currently open to non domestic water users (not sewerage) of more than 50,000m3 per year (note the English market is currently set at 5,000m3/year). Currently, the Welsh Government has the decision not to implement retail competition, as is currently being taken forward in England, as they remain to be convinced what measurable benefits this will have for Wales.

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