In April 2017, the largest competitive water retail market in the world opened for business, bringing the biggest change to the water sector since privatisation.
This new market means 1.2 million businesses, charities and public sector organisations in England are no longer restricted to buying water services from their regional monopoly. Instead, they can shop around, renegotiate, and find the right deal for them. If customers don’t like the service they get, they can take their business elsewhere.
This market can help to deliver lower bills, help people use less water, lead to improved services, and see new offers and bundles emerge.
Along with the potential benefits, businesses and other organisations want to know there is appropriate protection for them. And there is. We are closely monitoring and regulating the market and if we need to intervene in the market to protect customers, we will do so. We have also set limits on the price customers pay if they don’t switch or renegotiate a new deal, to prevent them losing out.
How does the market work?
The market works like many other open utility markets (such as telecoms, electricity and gas). Retail suppliers buy wholesale services, (the physical supply of water and/or removal of wastewater), and offer a package to sell to eligible customers.
Regional water companies continue to serve non-eligible and household customers. The retail business water market works alongside the existing market in Scotland, which is regulated by the Water Industry Commission for Scotland (WICS).
Find out more information on becoming a retailer here.
To find out how to switch your supplier please visit the Open Water website.
Who’s who in the market?
Customers – There are 1.2 million non-household customers in England eligible to choose their supplier of retail services. There are an additional 130,000 business customers in Scotland.
Retail suppliers – Retail suppliers are able to compete for the custom of all eligible business customers.
Wholesalers – Appointed companies that own and operate the network of pipes, mains and treatment works. They act as the wholesalers in the market, selling water and wastewater services to retail suppliers.
Open Water – Open Water is the name given to the programme set up by UK Government to open the new business retail market. The programme is being led by three partner organisations – Ofwat, Defra and MOSL. Open Water shares information about the market with customers.
Defra – the Department for the Environment, Food and Rural Affairs.
Ofwat is the economic regulator for the sector. We are also the licensing authority for the market. In order to compete in the market, suppliers must be awarded a licence.
MOSL – the Market Operator makes sure the market functions in a simple and efficient way. MOSL facilitates the transfer of customer information when they switch retail supplier.
WICS – The Water Industry Commission for Scotland is responsible for regulation of the competitive market in Scotland.
What about customers of companies in Wales?
Non-household customers who use the supply system of a water company whose area is wholly or mainly in Wales are not be able to choose and continue to receive their retail services from their existing water supplier.