Competition Introduction

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Competition

The framework for competition is set out in the Water Industry Act 1991 (WIA91) and the scope was extended by the Competition and Services (Utilities) Act 1992, the Competition Act 1998 (CA98) which took effect from 1 March 2000 and the Water Act 2003 (WA03).

WA03 placed a duty on Ofwat to protect the interests of customers, wherever appropriate by promoting effective competition. Ofwat also has a duty to challenge anti-competitive behaviour.

We develop competition policy, considering complaints under CA98, administering his duties in practice, publishing policy documents and working with stakeholders affected by the competitive framework. Although the team's role changes as policy develops and legislation changes, our work can be separated into four parts:

1. We take forward Ofwat's review of competition in the water and sewerage industries in England and Wales

2. We oversee the competitive opportunities that are available within the current framework. These include:

Inset appointments, where the appointed water or sewerage company can be replaced by another for a specific geographic area.
Proposals by potential competitors interested in competing in new and innovative ways.
Water Supply Licensing(WSL) – Since 1 December 2005 our focus has been on the operation of a new competition regime. The WSL regime enables new companies to supply water once we have granted them a licence. They can compete in two ways:
- by developing their own water source and using the supply systems of appointed water companies to supply water to customers' premises; or
- by buying water 'wholesale' from appointed water companies and selling it on to customers.

These provisions started on 1 December 2005.

3. We advise Ofwat and other Government departments on proposals to extend competition in the industry. We worked with the Government and the industry to implement the new WSL regime, introduced by the WA03 and will continue to work with them as we monitor that regime.

4. We make use of our powers to apply and enforce CA98 for the water and sewerage industry in England and Wales. This generally involves receiving complaints about concerns of anti-competitive conduct and, where we have 'reasonable grounds' for suspecting an infringement, we may investigate it under CA98 and make decisions about whether the conduct infringes CA98.

We were also responsible for developing policy on self-lay, where developers can choose their own contractor to install water mains and service pipes rather than asking the appointed water company to do the work.

We issue reports summarising our work on competition complaints.

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