This site uses the UK Government AccessKeys system
|
|
What's new | Publications | Media centre | Price review | FAQs Update alerts | Consumer issues | Site map | Competition | Contact us |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Media centre
Ofwat has taken two more steps today in its bid to increase competition in the water industry. It is asking its stakeholders – industry, organisations and government bodies with an interest in water issues – for their views on a series of measures which it wants to take to assist competition. The proposals are contained in two consultation papers published today. The move follows the publication before Easter of Ofwat's internal review into why progress towards a more competitive market had been disappointingly slow. This recognised that the two main barriers to competition are the Costs Principle and the size threshold. The Costs Principle requires companies to follow a very prescriptive method for setting prices for access to companies' networks. This produces margins that may be too low to allow retail competition to flourish. Ofwat is also required to follow the Costs Principle when giving guidance on access prices. The size threshold allows only commercial customers who use at least 50 million litres (50 Ml/y) of water a year to chose their water supplier – around 2,200 customers. The first consultation proposes changes to the Water Supply Licensing (WSL) guidance to improve the way the current WSL regime works. The second consultation, on secondary supplies, sets out how new entrants to the industry, known as water supply licensees can buy 'spare' water from an existing water company to supply their customers in a neighbouring water company's area. Following these consultations, which end on 1 June, Ofwat aims to implement the guidance as quickly as possible. Keith Mason, Director of Regulatory Finance and Competition said, "We have already recognised that the key barriers to competition are the Costs Principle and the size of the market. These require a change in the law but Ofwat is now proposing in these consultations to take some further steps under the current regime to promote competition." Notes to Editors: 1.The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will allow companies to carry out their functions properly, and finance them. Its duties include protecting the interests of consumers, wherever appropriate by promoting effective competition. The Water Services Regulation Authority succeeded the Director General of Water Services on 1 April 2006. 2.The main changes that Ofwat is proposing in the first consultation are: - - Requiring water companies not to request security deposits, bonds or other payment guarantees from water supply licensees. - For wholesale supplies, requiring water companies to report in more detail about the retail services that they provide to customers and those they expect to provide to water supply licensees. - For combined supplies, requiring water companies to provide more detailed forecasts of the costs of providing resources. - Strengthening Condition R which obliges water companies not to misuse information provided to them by water supply licensees. 3.Further details on the consultation can be found on (insert link) Media enquiries to Ofwat Press Office on: 0121 625 1416/1496/1442 Out of hours enquiries to: 0121 625 1300. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk  | ||||||
© Crown copyright |
Disclaimer & Privacy Statement |