From April 2017, 1.2 million businesses, charities and public sector organisations (“businesses”) that are customers of water companies operating wholly or mainly in England will be able to choose their supplier of water and wastewater retail services. Businesses that are customers of companies operating wholly or mainly in Wales will be able to choose their retailer for water (but not wastewater services) if their premises are supplied with at least 50 mega litres (Ml) of water per year.
As competition develops business customers who are eligible to switch should be able to change retailer to ensure that they receive the package of prices and retail services that best suits their circumstances. But in the transitional period, until competition becomes effective, business customers may need additional protections and so we are setting revised business retail price controls to provide back-stop protection for business customers and complement the development of competition. Continuing price control protection will also be needed for those customers of companies operating wholly or mainly in Wales, who will not be able to choose their retailer in a competitive market.
We published consultation papers on this price review in November 2015 and March 2016 and our statement of method in May 2016. This document sets out draft determinations for business retail price controls for the three year period immediately after market opening (April 2017). Our draft determinations for those companies operating wholly or mainly in Wales differ in certain respects from those operating wholly or mainly in England, reflecting the differences in the competitive arrangements between England and Wales.
These draft determinations are based on our assessment of whether the evidence provided by each company in support of its proposals for default tariff caps for customers using less than 5 mega litres (Ml) has met the requirements set out in our statement of method. We have also developed simpler backstop price controls to protect larger customers (that should be best able to take advantage of the competitive market) consistent with the approach described in our statement of method.