This consultation sets out the changes to the text of the following.
- The Instrument of Appointment (IoA) of appointed monopoly water only and water and sewerage companies in England and Wales (‘appointees’) and, where applicable, companies that have successfully applied for an appointment to replace the existing appointed water and or sewerage company at a particular site (‘new appointees’). Collectively appointees and new appointees are referred to as ‘undertakers’.
- The water supply licence (WSL) of existing companies licensed to compete to supply large users with water (‘licensed water suppliers’).
The purpose of the changes are to:
- remove the ban on licensed water suppliers associated with appointees from trading in the appointee’s area of appointment; and
- introduce a new ‘readiness’ condition requiring undertakers and licensed water suppliers to take the necessary steps to support the opening of the new retail market.
This document follows on from our recent results document ‘Consultation on licensing: results and decisions’ which was published on 9 December 2015. In that document, we identified five main deliverables required for the licensing framework for non-household retail market opening and explained the next steps that we intended to follow. This consultation concerns the next steps on IoA and WSL. We intend these changes to apply to all undertakers including, where applicable, new appointees.
Retail services include activities such as billing and customer services. At present, only a limited number of the largest non-household customers across England and Wales can choose their retailer. Most customers must use services provided by their local monopoly water only or water and wastewater companies. The Water Act 2014 will allow eligible non-household customers to choose their supplier of water and wastewater retail services from April 2017. For customers who use the supply system of an appointed company whose area is wholly or mainly in England, the market will be extended to include all non-household customers. For those who use the supply system of an appointed company whose area is wholly or mainly in Wales, the market will not be extended, reflecting the different policy position of the Welsh Government. More information on which customers are eligible is available in our eligibility guidance.
The new market is expected to deliver about £200 million of overall benefits to customers and the UK economy and research shows that seven out of ten non-household customers want this choice.
Customers will be able to shop around and switch to the best deal. Investors and retailers will have new opportunities for growth. And the environment will benefit from customers using new water efficiency services. Customers are already benefiting from a similar market in Scotland.
Opening the new market is a complex challenge but it is on track to open in April 2017. The design is almost complete, and work is now being carried out to deliver the technical systems, checks and ways of working that are needed to get the market right for customers. A key element of this are the licensing arrangements to support the new market.