Ofwat has today opened a consultation on its intention to accept binding commitments from Bristol Water under the Competition Act 1998.
In March 2013, in response to two separate complaints, Ofwat launched a formal investigation into the price and non-price terms Bristol Water applied when providing services to self-lay organisations. These related to the services provided by Bristol Water to enable the provision of new water infrastructure for new development sites, either by itself or by self-lay organisations. The complainants alleged that Bristol Water had used its dominant position to harm competition in the contestable market of providing new water infrastructure for new developments, making it difficult for self-lay organisations to operate in Bristol Water’s area.
Bristol Water has offered to make changes to both its structure and processes in response to the specific competition concerns identified by Ofwat in this case. This includes a clearer separation of Bristol Water’s downstream developer services functions, which operate in a contestable market, from its non-contestable upstream services.
Ofwat considers that the case raises issues of strategic significance for the industry, given that services for new water connections infrastructure is currently one of only a few areas of competition in the water and sewerage industry. The level playing field issues raised by this case will grow in importance as more competition occurs in the sector as a result of the new Water Act 2014.
Ofwat’s consultation, which runs for eight weeks until 18 July 2014, seeks views from interested parties on the appropriateness of Ofwat accepting the commitments offered by Bristol Water.
Notes to Editors:
- Ofwat (The Water Services Regulation Authority) is the economic regulator of the water and sewerage sectors in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.
- Ofwat has a statutory duty to promote competition and is alert to potential breaches of competition law. Effective competition can deliver a range of benefits for consumers, acting as a driver for more customer-focused, efficient and innovative services for consumers. Effective competition in the market of new connections infrastructure should both deliver these benefits to developer customers and contribute to wider economic growth by better enabling developers to bring forward development schemes.