Ofwat welcomes South West Water’s customer pledges


5 November 2015

Ofwat today welcomed commitments by South West Water’s Board to benefit South West and Bournemouth Water’s customers.

The pledge to customers follows the Competition and Markets Authority’s (CMA) publication of its findings into South West Water’s completed acquisition of Bournemouth Water.

Cathryn Ross, Ofwat Chief Executive, said:

“Since this merger was announced, we have been clear that our job is to protect the best interests of customers. While we have not opposed this merger, we consider customers do need to be protected to ensure they share in the benefits of the merger and are not disadvantaged.

“We have been in discussions with South West Water to address these issues. We welcome its public pledges and commitments, which will benefit both customers in its operating regions and across England and Wales.

“Last year we awarded South West Water enhanced company status when we assessed its business plan, recognising its strong customer engagement. We are pleased that it has pledged to be held to account by its independent Customer Challenge Group for the delivery of the commitments it has made to its customers. I am confident it will continue to engage with customers to ensure benefits resulting from this merger are transparent and demonstrable.”

Notes for Editors

  1. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. Its role is to help the sector build trust and confidence with customers and wider society. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future resilient water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.
  2. Under the Water Industry Act 1991 (as amended by the Enterprise Act 2002) the CMA has a duty to make an automatic reference to a phase 2 investigation if it believes that it is or may be the case that a merger of any 2 or more water enterprises in England and Wales has taken place and (i) that the value of the turnover of the target water company exceeds £10 million; and (ii) that the acquiring firm already owns water companies that each has turnover exceeding £10 million.
  3. In June 2015, the completed acquisition by Pennon Group plc (the owner of South West Water Limited) of Bournemouth Water Investments Limited (which operates Bournemouth Water) was referred to an in-depth investigation by the CMA. As required by the Water Industry Act 1991 (as amended by the Enterprise Act 2002), the CMA had to assess whether the merger could be expected to prejudice the ability of Ofwat to make comparisons between companies for the purpose of carrying out our regulatory functions.
  4. The CMA published its final decision on 5 November 2015. It concluded that the adverse impacts it found were not significant enough, either individually or in combination, to amount to prejudice to our ability to make comparisons between water enterprises and cleared the merger.
  5. The customer pledges and commitments of South West Water’s Board are set out here. The commitment to Ofwat includes a commitment to update South West Water’s licence and to work with us to evolve the way we regulate through future development of the operating licence.
  6. Media enquiries to Ofwat Press Office on: Benedict Fisher 0121 644 7642 / [email protected] James Sheward 0121 644 7644 / [email protected]