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Market Deregulation

Since 1st April 2017, water supply has become a competitive retail market. In the previous market, your water retailer was determined by location, which meant you had no choice and had to tolerate the service levels and pricing. This has given commercial and non-residential customers the option to switch to a supplier if they’re not happy with the services and cost, opening up the market to healthy competition.

The Open Water programme is led by the Department for Environment, Food & Rural Affairs (Defra), and the water industry regulator, Ofwat. With around 1.2 million customers, the £2.4 billion English retail water market is one of the largest in the world and now comes with the following focus:

  • Increase customers' freedom to choose

  • Encourage tailored levels of service and improved prices

  • Drive sustainable approaches to managing water and wastewater

Open Retail Water Market

Eligible customers can choose which retailer to buy water and wastewater services from, either as a combined service or individually. It is only the customer (front end services) that will change. Water and wastewater services are received from regional water companies (referred to as Wholesalers). The Wholesalers sell services to Retailers, who, in turn offer services to non-household customers in a competitive market, by negotiating the best deal and service agreement.

THE NEW MARKET OFFERS PROTECTION TO CUSTOMERS IN THE FOLLOWING WAYS:

  • LOWER PRICES

    .

  • IMPROVED SERVICE

    .

  • WATER EFFICIENCY

    .

  • MORE INNOVATION

    .

Market Players

  • WHOLESALERS

    Maintain the network and manage the physical supply of water and wastewater treatment

  • RETAILERS

    Provide billing, meter reading and customer services

  • MOSL

    Deliver the core IT systems that will enable registration, customer switching and settlement between wholesalers and retailers

  • CMOS

    The database that manages and stores market transactions, meter and SPID data and wholesale tariffs

  • TPI's

    (Third Party Intermediaries) Organisations and individuals that give advice and information to help you buy water for your business

PROTECTION

The new market will offer protection to customers in the following ways:

  • Deemed contract - default tariff retailers can charge for a standard service, although this is unlikely to be the best deal

  • Strict rules regarding clear contract information and protection against mis-selling

  • Guaranteed Standards of Service (GSS) - retailers must deliver service levels or pay a fee if they fail to meet them

  • Formal contract - to give legal protection

End user Benefits

  • Freedom to choose

  • Better value for money

  • Potential to negotiate lower bills and charges

  • Improved customer services

  • Reduced paperwork and administration

  • Services tailored for your organisation

  • Water efficiency advice and planning

  • Clear, easily accessed water usage data

Maximising This Opportunity

Eligible customers are able to look at all the supply options available to them including procurement through a retailer or applying for a self-supply licence. Eligibility depends on whether premises are used mainly for business, rather than domestic use and where an existing water and/or wastewater supplier is based. Securing the best deal and maximising efficiency depends on many factors such as business type, size, location and usage profile.

WHAT TO DO

  • Review existing situation

    Ensure current billing and charging is correct, if not rectify it now before switching supplier. This will ensure any refunds/rebates are maximised with your existing supplier

    When

    Immediately, ideally you have already started

  • Understanding your usage

    How, when and where you use water. Benchmark your portfolio, validate current position and address excessive consumption

    When

    Immediately, ideally you have already started

  • Determine business goals

    Whether cost reduction, consolidated billing or improved water efficiency, prioritise business goals with key stakeholders

    When

    Prior to assessing supply options

  • Review of supply options

    Assess which option best meets your goals, i.e. procurement for retailer supply or self-supply

    When

    Prior to beginning negotiations

  • Procurement or application

    Having decided on a preferred route, begin the process of tendering or applying

    When

    Now until 1st April 2017 (official switch will only occur on 1st April 2017)

  • Continual monitoring

    Either review of your new deal secured on 1st April or switching for the first time. Customers can switch anytime (depending on contract) and without reason

    When

    1st April 2017 and beyond

  • Nothing!

    Regardless of what you're being told, every business can benefit from Open Water

    When

    This should not be an option for any eligible organisation

Waterscan is here to help

Opt Out of Interim Supply Arrangements

As water and wastewater services are essential utilities, protections are in place in the event that a retailer makes a makes a disorderly exit from the market so that the supply points of affected customers’ premises are allocated to an alternative retailer without undue delay.

The Interim Supply Code (ISC) sets out the interim supply arrangements where a retailer is no longer able to provide services to its customers. Where this happens, customers do not need to take any action as OFWAT will transfer their water and wastewater services to an alternative retailer. During this time, customers will not notice any change to their supply as their water services will continue as before.

Interim supply arrangements only apply to retailers, they do not apply to wholesale monopoly water companies.

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