The licences would allow the company, which already supplies water to approximately 7,000 supply points in Scotland, to offer “full national coverage” of water and sewerage services in England.
The supplier currently operates retailing activities for the English business customers of Portsmouth Water.
Significant step
Ofwat opened the application process for those wishing to provide retail services in the new market at the beginning of this month.
The regulator’s chief executive Cathryn Ross said at the time: “There’s a lot of work still to do as we develop the largest competitive water retail market in the world. But opening Ofwat’s application process for retailers to apply for licences is a really significant and exciting step towards creating a successful market.”
Retail services cover activities such as billing, reading water meters and customer services and advice. Companies interested in providing such services will need to hold a water supply licence (WSL) or a water and sewerage supply licence (WSSL).
At present, businesses, based wholly in England and who use more than five mega litres of water – which means a water bill of about £9,000 – per year can choose their water retailer.
However, when the market opens the remaining estimated 1.2 million businesses, charities and public sector organisations will either be able to stay with their existing supplier, or shop around and switch.
Once open, the new market will link to the existing market in Scotland, and will be the largest retail water market in the world, delivering an estimated £200 million of overall benefits to customers and the UK economy.
Market preparations
Scottish suppliers, including Scottish Water subsidiary Business Stream and new entrant Everflow, have told Utility Week they are considering buying into the English market when it opens.
In January, Portsmouth became the first water company to reveal that it would exit the market when competition is introduced. And, early in March, Severn Trent Water and United Utilities (UU) stated their intention to team up and create a new, separate, and yet-to-be-named retail business.
Read Utility Week’s analysis: Severn Trent and United Utilities ally: the dawn of a new era?
Of the remaining water-only companies (WOCS), Affinity Water, Bristol Water, Essex and Suffolk Water, Sutton and East Surrey Water and Cholderton and District Water all tell Utility Week they plan to remain in the market, with South East Water and Cambridge/South Staffordshire Water refusing to comment. And of the WASCs, eight of nine say they will not exit the retail market, with Southern Water saying it is “undecided”.
Other companies have begun positioning themselves for market opening, with Northumbrian Water announcing a rebrand of its business retail arm to ‘Wave’. Utility Week understands Anglian Water and at least one other WASC are set to follow suit.
Read Utility Week’s analysis: one year to market opening and WICS chief executive Alan Sutherland’s advice on how to prepare