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Competition

Bournemouth Water provides, we believe, high quality services to its customers. Doing so reliably involves many complex processes and round the clock surveillance and response to ensure the risk of failure remains extremely low. We also believe that we offer good value for money.

In 2002 the Government announced that it would take steps to introduce competition in water supply and the Water Act 2003 amended earlier legislation to enable this in certain circumstances. 

Competition was therefore allowed under the terms of the Water Industry Act from December 2005 for supplies of water to larger customers, that is, those using more than 50 megalitres of water a year. Competition for supplies to domestic customers is not allowed. 

In 2011 the Government published Water for Life (otherwise known as the Water White Paper) in which it stated its desire to reform the market for business customers.

The paper laid out a number of steps to reform including:

  • Expanding the size of the market by increasing the number of business and public sector customers able to switch suppliers by reducing the competitive threshold to zero
  • Establishing a new market for retail water and sewerage services in partnership with the Scottish Government
  • Introducing a new regulated approach to market entry and removing the need for new entrants to negotiate terms with each of the incumbent water companies across England
  • Legislate for Ofwat, along with other regulators and market participants to establish statutory market codes 
  • Remove the costs principle from legislation (see Indicative Access Prices below)

As a result of Water for Life in December 2011 the competitive threshold was reduced to 5 megalitres.

Water Act 2014

On 14 May 2014 the Water Act 2014 received Royal Assent. The Water Act will enable the Government to implement proposals set out in Water for Life.

Compliance

The South West Water compliance code that we follow for all forms of competition access is available to download here.

Open Water 

Open Water is charged by Government to coordinate the development of the market rules, framework and systems required for an effective non-household retail market, these activities are known as The Open Water Programme. The competitive market for non-household water and sewerage retail services will open in April 2017. This will be for the retail element only of the water supply service. 

Under the arrangements being put in place the retail element of the service is open to competition. The physical supply and distribution of water to end users will, for the time being, remain a regional monopoly service where the standard of service and prices remain regulated by Ofwat.

Competition – the current situation

Subject to any changes occurring as a result of the commencement of provisions in the Water Act 2014, and to subsequent changes in guidance, there is currently provision for two forms of competition:

Retail competition

Under this provision, a licensee may buy water (a wholesale supply) from an existing undertaker for retailing to an eligible customer. In this form of competition there would not normally be any physical change to the water supply. The same water would arrive at the same customers’ premises but the retailer would sit between the statutory service and the customer. He may offer other services which we could not.

Common carriage

A licensee might find a new source of water and wish to convey it to a customer. In this case he may apply to the undertaker for an agreement to access the existing undertaker’s network of pipes. Providing a number of criteria are met, including ensuring there is no undue risk to the safety of the drinking water, we would have to grant access at a charge which recovers any reasonable additional expenses we incur but which does not involve subsidy by other customers.

We are happy to answer any questions or queries on emerging competition in water. We would encourage any customer who might be considering looking for alternative supplies to contact us early in the process so that we can do our best to respond to any concerns about the present service. More information may also be found on the website of the economic regulator, the Office of Water Service (Ofwat).

Indicative access prices

The indicative prices for access for common carriage and for wholesale supplies of water which are found below, have been calculated in accordance with guidance issued by Ofwat. The methodology used and format of presentation is set out in that guidance.

These are indicative prices only. In response to any actual application for access, we will calculate case specific prices as required by the Water Industry Act 1991. There could be differences, either positive or negative from the indicative figures given here.

The prices referred to were calculated as part of the Periodic Review process which completed with Ofwat's Final Determination of prices on 12 December 2014. For future years, figures are of necessity estimates.

The access code applies to customers consuming not less than 5 megalitres per annum. The access code may be amended in relation to any future changes in the competitive thresholds.

All enquiries regarding competition and access to our system should in the first instance be addressed to:
Matt Woolcock
Compliance Officer
Peninsula House
Rydon Lane
Exeter EX2 7HR

01392 443094

Or email us.

Press Office

Journalists can contact the Press Office on 01392 443020 or via email

 

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