Hospitality industry set to benefit from new English water market
From April 2017, all businesses in England will be able to buy water and wastewater services from whoever they choose, which is expected to result in more choice and lower prices.
The current system is to be replaced by a deregulated market where all businesses will be able to buy water and wastewater services in a similar way to gas or electricity.
Currently, water and sewerage pipes are owned and maintained by regional water companies. From April, water companies will separate their services into wholesale and retail. The wholesale company will continue to look after the network of pipes in their region. They will sell water and sewerage services to the retail company, which will in turn sell these services to businesses. Ofwat will set an upper limit for water prices, and prices available to businesses will vary within this rate.
Companies could offer leak detection, automated meter readings, and lower prices, according to a report by independent business energy broker Perfect Clarity, based on the example of Scotland, which went through the same process in 2008.
According to the report, since 2008 the Scottish water market has seen more choice, lower prices, greater efficiency and more innovation, with businesses seeing discounts close to 25% on their water bills.
Scottish Water are the only wholesaler in the Scottish market, looking after the water and sewerage network throughout the country. They then sell water and wastewater services to the water companies (retailers) which were created when the market opened up. The water companies sell these services to businesses.
There is an upper limit for prices, but within that rate there is room for competition between suppliers.
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