5 things you need to know about the new water market
The countdown to competition is almost over. From April 1, the world’s largest retail water market will open for business in England. But who will be able to switch supplier and what could choice mean for the 1.2 million businesses, charities and public sector organisations that suddenly have the freedom to shop around? Our market expert, Policy Manager Evan Joanette, has the answers.
Who will be eligible to switch?
Until now, only very large non-household water users in England – over 5 megalitres a year – have been able to switch water retailer. But a change in the law means that threshold will go out the window from 1 April 2017, opening the door for 1.2 million businesses, charities and public sector organisations to switch supplier for the first time.
In most cases it’ll be clear if you’re eligible to shop around. Water companies should have already told you whether you fall into the category of ‘household’ or ‘business.’ The regulator Ofwat has also produced guidance to prevent more complicated circumstances from muddying the water opens in new window . For instance, if you run a care home, you’re in the retail market. But sheltered housing is not. Once the market opens, you can appeal to Ofwat if you find yourself disagreeing with a water retailer over your classification.
If you’re a customer of a water company based wholly or mainly in Wales, you won’t be able to switch unless you use over 50 megalitres of water a year. That’s because Welsh Government has chosen not to pursue a competitive market.
What services will retailers provide?
Retailers provide the customer-facing services – so things like billing, meter reading and dealing with customer complaints and enquiries. These are the services that will be up for grabs in the new marketplace. Your water supply will still be pumped to your premises by the existing wholesalers, who will also continue to treat the wastewater you flush away. These are the water companies that have become household names since privatisation of the water sector in 1989.
How many new retailers will be competing for business?
New retail suppliers are being spun off from the existing water and sewerage companies. Some retailers operating in Scotland – like Business Stream – have also sought licences to operate south of the border, along with a trickle of completely new names, such as The Water Retail Company. Open Water has created a useful guide to help you navigate the new market
What are the potential benefits for eligible customers?
Choice has the potential to deliver a range of benefits for customers but the scale and nature of these will vary. Retail services account for about 10 per cent of your average water and sewerage bill and retailers will have a limited profit margin – around 2.5 per cent – but savings to customers will be available. Your organisation may also benefit from tailored services that can help you become more water efficient or waste less time wading through administration. Businesses operating across numerous sites could also benefit financially from consolidated bills.
Who will help customers if something goes wrong?
CCWater has worked hard behind the scenes with market designers, Ofwat and retailers to ensure customers are protected from poor practices which have affected some other competitive markets. But it’s inevitable there will be some teething problems as the market beds in and we are presented with new challenges. In the first instance, retailers will be expected to quickly resolve any complaints or concerns raised by customers. But if they are unable to do this, CCWater will continue to step in and take up individual complaints on behalf of customers. We have over ten years of experience helping households and businesses resolve disputes with their water company and secure financial redress.
If you ever need our help call us on 0300 034 2222 or email [email protected]
Check out the Open Water opens in new window website for more free and impartial advice on the new retail water market.