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).
Ofwat chief executive Cathryn Ross said: “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.”
Those wishing to apply must have an understanding of the new market arrangements and identify the part or parts of England they wish to operate in, the regulator said.
They must provide all information required in the online application form and pay a fee of £5,250.
Once the application process is complete, details of the application will be posted on Ofwat’s website as part of the required 20 working day public consultation.
The regulator said a detailed assessment of the applications could take up to two months after that consultation period.
In the new market, it will be possible for individual eligible customers, such as large supermarkets, hotel chains or hospitals, to become their own retailer and self-supply with retail services.
However, this would allow them to supply their own and associated sites, but it would not allow them to become a retailer for any other sites.
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, from April 2017 the market will open to the remaining estimated 1.2 million businesses, charities and public sector organisations – allowing them to either stay with their existing supplier, or shop around and switch.
Once open, the new market will be the largest retail water market in the world, delivering an estimated £200 million of overall benefits to customers and the UK economy.