by Megan Darby
The draft Water Bill threatens to destabilise investor confidence by giving the regulator extra powers and discretion with inadequate checks, MPs have been told.
In written evidence to the Environment, Food and Rural Affairs Select Committee, a number of water companies called for clearer leadership from government or a stronger appeals mechanism.
The draft legislation gives Ofwat a greater role in setting policy, but this was “not accompanied by effective measures to ensure Ofwat can be held accountable”, according to Anglian Water.
Wessex Water said it was particularly concerned about provisions allowing Ofwat to make changes to company licences it deemed necessary to enact the Bill. It also noted that the regulator’s power to penalise companies after an infraction of the rules had been extended from 12 months to five years.
Business Stream focused on proposals to develop an Anglo-Scottish non-domestic retail market. It warned in its submission: “The draft Bill leaves latitude and freedom for Ofwat to implement change in a number of ways. This may create risk that incumbents could frustrate progress.”
It was one of several respondents, including Scottish regulator Wics and a number of English water companies, to call for incumbents to be able to exit the retail market. That would involve companies legally separating their wholesale and retail functions.
Many submissions raised concerns about how upstream competition could be reconciled with the need for strategic planning, environmental safeguards and optimising networks.
Mind the sustainability gap
Environmental, angling and water efficiency bodies said the draft Water Bill had “serious omissions” around sustainability.
The Blueprint for Water coalition is calling for enabling legislation on abstraction reform, to avoid the need for another Water Bill in the next Parliament. Red tape that prevents compulsory metering outside water-stressed areas should be scrapped and Ofwat’s sustainable development duty should be elevated to primary status, it said.
This article first appeared in Utility Week’s print edition of 28th September 2012.
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