PN 01/17 Ofwat sets out plans for monitoring the business retail water market


12 January 2017

Ofwat today warned it would be closely watching water retailers when the market opens for 1.2 million business, charity and public sector organisations. And it will not hesitate to take action right from the start if it sees misconduct.

From April this year, eligible business customers in England will be able to choose who they pay for their water and wastewater retail services

The UK Government has estimated the market will contribute around £200 million to the UK economy and to bring significant environmental benefits. However, these benefits will be achieved only if the market is truly competitive and efficient, with all retailers giving clear advice to customers about the opportunities to switch tariffs or suppliers.

Having learnt from experiences of other regulated markets, the energy and financial markets in particular, Ofwat has applied them to its monitoring and intervention approach.

Ofwat senior director Richard Khaldi says:

“Introducing choice for businesses, charities and public sector organisations is the biggest change to the water sector since its privatisation more than 25 years ago. This will create the biggest competitive water market in the world.

“We want to ensure this market operates well and protection is in place to build customer trust and confidence. And we will not hesitate to take action right from the start if we see customers being missold or mislead.

“The new market offers opportunities to help you get a better deal as a customer, such as combining multiple sites into one electronic water bill or having a combined utilities provider, potentially saving money and time. If you are a small to medium sized enterprise (SME) or high street business, you can benchmark what other companies and businesses of your size in your sector are doing, which could help you save money and also save water, which is great for the environment.

“But with opportunity there are risks, which is why we want to ensure all customers have choice and know how to exercise that choice, so they can make informed and considered decisions.”

Ofwat plans to get a full picture of the new market by using several different methods including water retail company reports, the experience of customers and water retailers, any complaints it receives, market research and proactive checks.

It will consider intervening where there is a risk to the effective operation of the market or where there may be significant detriment to customers.

Ofwat is now asking for people to have a say on the consultation it has launched about how it monitors the market and ensure customers are protected. The consultation closes on 10 February. You can read the consultation on our website and give your feedback via email to [email protected]