Roll up for the
WWT presents a summary of some of the information and technologies that water industry visitors can expect to find at the ET2005 show
Competition in the water industry is set to intensify. From autumn 2005, amendments to the Water Industry Act 1991 provide a framework for market entrants to become authorised to enter into common carriage or wholesale agreements with water companies to supply non-household premises that consume at least 50Ml of water annually. Such customers will be able to either purchase water from their existing provider or from a water supply licensee. The Water Act 2003 updates the 1991 Act and legislates for change in direct response to the government’s July 2002 consultation paper – Extending opportunities for competition in the water industry in England and Wales. With them, the changes carry the expectation that competition will bring water prices down.
In contrast to these expectations, however, water bills will rise by an average of 11% from this month, the fourth rise since the water industry was privatised in 1989. Consumers face price increases that vary sharply across England and Wales, affecting people in the southwest most. While gas and electricity customers can take advantage of deregulation and increased competition and switch supplier, most water customers do not enjoy the same freedom.
The water industry is currently made up of local monopolies. Government has repeatedly been reluctant to allow mergers in the industry, on the basis this would lead to higher prices. Equally, Ofwat has been reluctant to see the number of price comparitors shrink.
From Autumn 2005, business and commercial sectors should have the opportunity to shop for better prices. Government is committed to reviewing the new regime, including the 50Ml threshold, within three years of it being implemented.
Currently there is speculation regarding the new water-licensing regime – is it an important and worthwhile experiment or must it be reviewed far sooner? Clear and early signs that customers are switching suppliers would indicate there are no barriers to new entrants on the market and that the regime is working. However, there is an underlying fear hidden barriers from the outset will prevent market entry and hinder competition. Ofwat has been criticised for its lack of transparency in the price setting process, there have also be complaints about insufficient information in water companies’ business plans. Consumer groups are asking for more details on how costings are treated by water companies and Ofwat, while raising concerns low-income households will be unable to meet higher bills.
Barbara Young, chief executive of the Environment Agency who will be opening ET2005 on May 24 this year, said: “Water prices are rising, but the contribution for environmental improvement is only a part of the increase and it offers water customers very good value for money.” Nevertheless, a report released by the Environment, Food and Rural Affairs Select Committee states the costs of cleaning up agricultural pollution, urban run-off and accommodating the effects of climate change should not be included in water charges.
In addition, the committee asks that water companies are more transparent about how they set prices and what water customers are in fact paying for. In an industry that is so tightly regulated, competitive advantage will be gained by those companies who improve the efficiency of their given resources. Though climate change presents the water industry with long-term, complex challenges, it must be accommodated and success will go to the company that does so.
ET2005, the UK’s leading exhibition for environmental technology and management services, offers free seminars hosted by British Water that present advice and solutions to such environmental legislation and water management issues. Visitors to ET2005 will be able to view a range of technologies, products and services designed to help businesses and industry adapt to and mitigate environmental impacts.
A comprehensive three-day programme of conferences and seminars, workshops and briefing sessions positions ET as the ultimate environmental forum for industry and the public sector. Details of exhibitors are available online at www.et-expo.co.uk, as well as free registration to the event and show updates. Alternatively, to attend the ET2005 event on May 24-26 at the NEC in Birmingham, call the ticket hotline for free tickets on 0870 443 6089.