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Changing Currents: Why Switch Your Water Supplier?

In April 2017, water retail competition will start in England, joining Scotland, which has been successfully open to competition since 2008. As a result, the English water market will become the largest deregulated retail water market in the world to date.

The open market will allow 1.2 million businesses, including charities and the public sector, to choose who provides their water and sewerage services, similarly to how they can choose their electricity and gas suppliers.

Undoubtedly, competition is a key mechanism to encourage innovation. With it, companies are under pressure to distinguish themselves from the competitors, mainly through the introduction of value-added services and aiming for greater water efficiency to differentiate through better prices. The deregulation will pave the way for further significant changes in other areas of the water and wastewater industry. (more…)

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Water Shadow Market Underway

The water market for businesses in England is due to deregulate in April 2017, which means that companies will be able to choose their water and wastewater supplier, opening the way to competition. Currently, only businesses that use in excess of 50ML per site are eligible to switch suppliers in England, but from next year, any business will be able to choose their retail company.

In 2008, Scotland was the first country in the world to deregulate its water market and the evidence to date indicates that customers in Scotland have achieved price reductions, service improvements, and a reduction in consumption.

Under deregulation, the water wholesaler that delivers water to the site will not change and will remain geographically determined. It is the retail company that is responsible for the billing, meter readings, and other services that can be selected. Fifteen companies have so far applied to OFWAT for a license to operate in the new market including a non-water supplier, Waterscan. Meanwhile, some water suppliers have taken the option to exit the retail market, instead choosing to focus on domestic customers. Portsmouth Water and Thames Water will pass their business customers to Castle Water, while Business Stream will look after Southern Water’s business customers. In these cases, businesses will be transferred to the new providers unless they opt to go elsewhere.

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