In April 2017 the business water market in England will be opened up for competition, allowing businesses in England to choose their own water supplier. This will work in a very similar way to the energy market.
Businesses will be able to buy water and wastewater services from the supplier of their choice. We expect the competition between suppliers to reduce business water bills with more competitive pricing. This should also improve customer service and infrastructure as well.
The example set by the water market in Scotland
The water market was opened up in Scotland in 2008. Since then, the Scottish water market has seen more choice and lower prices. The water market has also seen greater efficiency and more innovation as suppliers look to be more competitive. Once these improvements were in place, prices fell further still.
Scottish Water are the sole wholesaler in the Scottish market, and they look after the network of water and sewerage pipes. They sell water and wastewater services to the water companies (suppliers). These suppliers then sell the services on to businesses.
There is an upper limit for prices, but within that rate there is room for competition between suppliers.
How will the water market work in England?
In the current set up, the network of water and sewerage pipes are owned and maintained by the existing water companies. From April 2017, these water companies will become the wholesalers in the new water market. They will look after the network of pipes in their area. They will also sell water and sewerage services to the new water suppliers, who will in turn sell these services to businesses.
Ofwat will set an upper limit for water prices, and prices available to businesses will vary within this rate.
Some of the existing water companies are also expected to be suppliers in the new water market. Others are transferring their non-household retail business to new suppliers. They will remain responsible for the upkeep and quality of water in their region as a wholesaler in the new energy market.
It is the biggest shake up of the water market in England since privatisation in 1989. We expect it to be beneficial to businesses, who should benefit from lower water prices and improved customer service. Perfect Clarity will be offering the same brokerage service to water that we do for energy. Please call us if you have any questions, or register your interest here.
Perfect Clarity can help businesses save money on their energy and water contracts. Call 020 3372 6517 for more information.