South East Water receives sewerage licence

South East Water has been granted a sewerage licence by the regulator Ofwat, to allow it to offer its existing 55,000 business customers sewerage services as well as water.

The company applied for the licence for its business retail arm, South East Water Choice, in August. This will enable it to offer sewerage services to business customers nationwide, but water services within its existing water supply licence area only.

Under the amended Water Industry Act, water-only undertakers cannot hold a water supply and sewerage licence (WSSL).

In October, the company applied for a WSSL through its existing subsidiary Invicta Water, and said it would trade as ‘Water Choice South East’.

South East Water told Utility Week it will not exit the market, but will take things “one step at a time”. Managing director James Dubois said the company’s focus will be on retaining its existing customers, particularly against Scottish retailers Business Stream and Castle Water which both now have interests in the South of England.

This application brings the total number of companies to have received licences to 14, and 19 have applied, since Ofwat opened the process. The regulator has predicted as many as 40 new applications in the coming year.

First licences were granted at the beginning of October. Successful applicants were: Anglian Water Business; Castle Water; Clear Business Water; Kelda Retail – now part of Three Sixty – Northumbrian Water Business – now Wave – Severn Trent and United Utilities, on behalf of Water Plus; South Staffs Water Business; SES Business Water; and Water 2 Business – a joint billing venture between Wessex Water and Bristol Water.

Business StreamCobalt Water, Pennon Water Services, Thames Water Commercial Services (which has since decided to exit), and Affinity for Business have also been successful in obtaining licences.

In November, Pennon Group announced it has entered into a joint venture called Pennon Water Services with South Staffordshire Group. Each company will retain their existing trading names in-area, and the joint venture will trade out-of-area as Source for Business.

Companies which have submitted applications which have not yet been granted are: water management firm Waterscan; commercial gas supplier subsidiary Regent Water; Invicta Water (Water Choice South East); and brand-new water supplier called The Water Retail Company.

Small Scottish supplier Everflow told Utility Week it is considering buying into the English market when it opens and will be applying for a licence soon. Veolia UK has also said it wants to grow its retail activities in the market, but has not yet applied for a licence.

New entrant Blue Business Water also told Utility Week it will apply for a licence before the market opens. Chief executive Chris Clark stressed that the company is “keen to acquire the customer bases of companies looking to exit”.