Water, water everywhere, but who will charge for a drink?

It is now less than one year until most businesses will be able to switch water supplier. To briefly recap on the background, the Water Act 2014 provided the legislative framework to give nonhousehold customers in England choice of retailer for all of the water and wastewater services they use. Scottish business customers already have choice, while Wales opted out of the changes and will stick with existing arrangements.

Wholesale service provision in England will remain the monopoly of the incumbent water company in each area. This means customers will receive the same water, through the same pipes as ever, but could opt to switch to a new supplier for retail services such as billing, account management and water management assistance.

This new supplier could be an established water company from another area, a new entrant dedicated to water supply, or potentially a company that will bundle water in with other services it already supplies to the business market perhaps an energy firm or a facilities management company.

Since the passage of the Water Act, and with particular intensity in the last year, all involved parties in England have been busy making preparations for the new competitive market. The main players and the latest on their key activities are:

MOSL: Market Operator Services Ltd is an organisation that has been set up to design and build the Central Market Operating System (CMOS) – the data and systems hub through which all wholesalers and retailers will connect and all switches take place. This is challenging work and is taking place in a tight timeframe, given the market’s go-live date of 3 April 2017. On 25 April this year, MOSL released CMOS for market participants to start testing.

DEFRA: The Department for Environment, Food and Rural Affairs is the government department leading on business retail market opening. Two of its core responsibilities are to provide regulations to enable monopoly water companies that don’t want to take part in the competitive market to exit (customers will need to be transferred to an alternative supplier), and to oversee the Assurance Framework – a programme of activity designed to keep a check on how ready all the relevant parties are for market opening.

Ofwat: The water regulator is providing most of the policy and regulation needed to make the market work. This is far reaching and includes: the provision of a Customer Protection Code of Practice all market participants will need to abide by; designing new types of licences (WSSLs) for entrants; altering the licences of existing water companies to accommodate competition; creating interim supply arrangements; and of course overseeing the retail and wholesale charging framework for business customers from 2017 onwards.