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Plans to enable large water users to choose their supplier moved closer today with the publication of two further consultations on the framework for competition. The new water supply licensing regime, which is being created as a result of the Water Act 2003, will allow business customers that use at least 50 megalitres of water per year to remain with their existing water company or move to a new water supplier. This will affect about 2,300 customers who collectively spend around £210 million each year on water. The first consultation invites views on two new conditions that would be introduced on existing water companies. This would require them to:
It also sets out 14 standard licence conditions for new water suppliers. These include their conduct and a requirement to provide regulatory information to Ofwat. The second consultation paper sets out the existing supply arrangements that would be prohibited under the new water supply licensing regime unless, as we propose, they are allowed to continue. The aim is to minimise possible disruption to existing arrangements and the scope for the arrangements being duplicated under the new regime. It also sets out the proposed legal text that allows the exceptions. The consultation papers have been developed with the Department for Environment, Food and Rural Affairs (Defra) and the Welsh Assembly Government (WAG). The proposed conditions that would be placed on existing and new water companies are in response to policy proposals published last February. Tony Smith, director of competition and consumer affairs at Ofwat, said: "There need to be rules and procedures for existing and new water suppliers to allow effective competition to develop. "The final conditions we put in place will strike the right balance between creating a framework that will foster competition and ensuring that we do not take unnecessary risks in areas such as public health. "In the second consultation paper, we want to make it clear which competitive water supply activities will be allowed when the new regime takes effect." Notes to Editors: 1. The Director General of Water Services is the economic regulator of the water and sewerage companies in England and Wales. He exercises his powers in a way that he judges will allow them to carry out their functions properly, and finance them. 2. The consultation documents, 'Water undertakers' new conditions of appointment/licence conditions for water supply licensees' and 'Policy proposals on exceptions regulations and exemptions', will be available on our website, www.ofwat.gov.uk, or from the library by calling 0121 625 1373. 3. A megalitre is the equivalent of one million litres. 4. Consultation responses should be sent to Hayley Purcell, Competition Policy Team, Office of Water Services, Centre City Tower, 7 Hill Street, Birmingham, B5 4UA, or by email to hayley.purcell@ofwat.gsi.gov.uk to be received no later than 5pm on 22 March 2005. 5. Defra expects to determine the final standard licence conditions for new suppliers in summer 2005. Ofwat expects to publish the final modifications to the licence conditions of existing water companies in summer 2005. Prospective suppliers will be able to apply for a water supply licence in summer 2005, with the new competition regime to begin in autumn 2005. 6. The new competition regime will apply only to water supplies and not the provision of sewerage services. Where a customer switches from an existing water company (appointed under the Water Industry Act 1991) that also provides a sewerage service, that water company will continue to provide the sewerage service unless other arrangements are made. MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1416/1496/1442 Out of hours enquiries to pager: 08700 555 500 water 503/509. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk  | ||||||
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