While a “yes” vote could have significant ramifications for the energy market in Scotland, the water market already operates as a separate entity. It has successfully pioneered competition for non-domestic customers; a model that England is now following. The biggest impact of independence for the water market would likely be the establishment of a new pan-utility regulator, as proposed by the Scottish Government. This body would take on Ofgem’s Scottish responsibilities, as well as the work of the current Scottish water regulator, the Water Industry Commission for Scotland (Wics). Utility Week spoke to Wics’ chief executive Alan Sutherland.
“I don’t have an official view, and the policy in Scotland is that economic regulation of the water sector in Scotland would continue – irrespective of the result of the vote on 18 September. The government seems to be content with how the regulatory framework operates as regards price setting, and proud of the way the contestable market for non-household customers is developing in Scotland – and that was always an initiative of the nationalist government.
“The Scottish Government has indicated its belief that a pan-utility regulator would be the best route, and none of the other parties seems to disagree. That’s something that could happen irrespective of the result of the referendum.
“In my view it would be wise to start afresh – rather than, say, rebranding WICS and giving it additional powers. There’s a clear message from other countries that have established single utility regulators that it is better to start again, learning lessons from the regulation of water and from other utilities both in Scotland and elsewhere.”
Scotland special part 1: The last days of the union?
Scotland special part 2: Ed Davey and Fergus Ewing
Scotland special part 3: Untangling energy will be no easy task
Scotland special part 4: Turbulent times lie ahead for retail sector