New obligations on water companies to prepare for competition
Ofwat has placed two new obligations on water companies in order for competition to develop further in the water industry in England and Wales.The changes will require each regulated water company to put in place arrangements that will enable their water supply systems to be used by licensed water suppliers; and for eligible customers to transfer effectively to another water supplier.
Tony Smith, Ofwat Director of Competition and Consumer Affairs, said the new conditions would act as the cornerstone for developing competition in the water industry.
"It is critical that a new water supplier understands the terms on which they will be able to use an existing water company's supply system if they are able to compete fairly," he said.
"And a clear, simple and standardised transfer process will ensure that customers can easily change supplier and take advantage of the benefits of competition."
The new conditions are in preparation of the launch of the new water supply licensing regime on December 1st 2005. After this date, licensed companies will be able to supply water to individual customers that use at least 50 megalitres of water a year.
This could affect some 2,200 customers who collectively spend approximately £210 million per year on water charges.
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