Ofwat has today (9 April) named Clear Business Water as the business that will take on customers of failed company Aquaflow Utilities.
The announcement marks the first time the regulator has used the ‘interim supply process’ in the water retail market, which launched two years ago this month.
Last month news emerged that Aquaflow, which had around 74 business customers, was expected to enter liquidation and become the first player to exit the market.
The company was granted its supplier licence on 4 January 2018.
Ofwat’s senior director of customers and casework Emma Kelso said: “Customers should be reassured that they now have a new retailer in place following the revocation of Aquaflow’s licence.
“This is the first time that we have had to use the interim supply process to protect customers, and while it is always difficult to see a company fail, not all retailers will thrive and it is possible that in the future, others will leave the market too.
“There are many more retailers in the market offering increased benefits for business water customers, and we expect more to join in the coming months.”
Chris Earle, chief executive of Verastar, the parent company of Clear Business, said: “It is saddening, although not unpredictable, to see the first water retailer in England enter the interim supplier allocation process.
“The tight retail margins set as part of PR16, combined with onerous working capital arrangements for non-associated retailers has made it incredibly difficult for businesses to enter and gain traction in this market.
“The anticipated wholesale cost reductions through PR19 provide Ofwat with a unique opportunity to correct this, enabling competition to enter the market and safeguarding customers by preventing a reoccurrence of this scenario on a potentially much larger scale.
“Ofwat selected Clear Business based on the assurances we provided in ensuring the smooth transition of services for customers, supported by our extensive experience of managing large scale customer base transfers.
“Despite the unfortunate circumstances surrounding this, we are delighted to welcome affected customers to our business and will be contacting each of them directly over the coming days.”
Water retailer Business Stream previously confirmed to Utility Week that it would not put itself forward to take on the customers of Aquaflow.
Jo Dow, chief executive of Business Stream, said: “We announced our most recent acquisition of Yorkshire Water Business Services and Three-Sixty at the start of this year, doubling our market share and positioning us as one of the top three retailers in the UK water market.
“This deal is hugely significant for Business Stream and our key priority at this time is in ensuring a smooth transition for our newly acquired and existing customers.”