England’s Open Water market officially launched on Saturday, April 1st, opening up new economic opportunities worth around £200 million for a wide range of players.
Since 2011, only businesses and non-household (including businesses, charities, nonprofits and public sector bodies) customers who use more than five million liters of water a year have been able to choose who supplies their water and wastewater services. With the market now open to competition, approximately 1.2 million more businesses are no longer required to purchase water services from their regional monopoly. They are now eligible to negotiate with current suppliers or shop around to find the right deal for them.
The new program, which is a joint effort between the Department for the Environment, Food and Rural Affairs (Defra) and economic regulator for the water sector Ofwat, operates in a similar fashion to other utility markets. Wholesalers provide water and wastewater services to retailers, who in turn sell those services to business customers. Retailers compete with each other by offering the best deal and eligible customers can choose which retailer to buy water and wastewater services from.
Open Water is anticipated to improve efficiency (customers will have the opportunity to consolidate bills) and services and drive down costs, as well as provide a boost to the UK economy to the tune of £200 million. It follows in the footsteps of a similar market model in Scotland, which launched in 2008.
In response to the new market, Anglian Water Business (AWB) and Northumbrian Water Group (NWG Business) — which together have a customer base of 250,000 customers and turnover of £500 million — have announced that they will be joining forces to create a new retailer of water and wastewater services in England and Scotland.
“The opening of the market enabling non-household customers to choose their supplier is a significant moment for the industry. We’re very excited at the prospect of using our combined strengths to bring a new offering to customers who are able to make a choice for the first time,” said Heidi Mottram, Chief Executive at NWG Business.
“We have every confidence that this joint venture will create a very compelling offer for non-household customers, both present and future. Our investment in customer service and IT capabilities demonstrates our commitment to make sure that the new market succeeds and that our customers experience genuine benefits as a result.”
In addition to water and wastewater services, the new retailer, Wave, will also provide gas and electricity services. The launch of the retailer is subject to approval from competition authorities and the two companies will enter the new open market as separate entities.