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The Topic: Competition COMPETITION THE TOPIC 12 | 18TH - 24TH NOVEMBER 2016 | UTILITY WEEK R etail competition in the water sector is not new. Large indus- trial customers, using more than five megalitres of water a year are able to switch and have been for some time. The change coming in April 2017 is that this will be widened out to all business and commercial customers. The final preparations for the market are underway, with shadow market operation currently underway to allow retailers and whole- salers to get to grips with the systems they will be using. Some incumbents, notably Thames Water and Southern Water, have exited the market, leaving their focus squarely on their domes- tic offerings. Their exit has paved the way for Scottish retailers – buoyed by eight years' experience of a competitive market – to move their attentions southwards and establish footholds in England. Business Stream and Castle Water are the two leading challengers. The incumbents are putting up a stout defence, and indeed going on the offensive, with new brands being created – including the joint venture between United Utilities and Severn Trent, called Water Plus. It is hoped the English retail market will learn from the Scottish market and be competitive from day one, with retailers eager to contest market share on more than just price. Customer service and water efficiency, along with the obvious benefit of single bills for multi-site customers, are set to be the main battlegrounds. Last year, and during industry preparations for opening the non- household market, the government unveiled its intention to open the domestic water market as well. Since then, Ofwat has conducted a review of the plan, and stated that the benefits from opening the market to competition could be worth £2.9 billion over 30 years, which amounts to £8 per customer per year. Ofwat chief executive Catherine Ross said: "We are living in an age of retail revolution, but water customers are being le behind. "Customers tell us they think they should have the freedom to choose and don't understand why water is the only retail market in which there isn't some form of competition." However, there are concerns that the small savings on offer, cou- pled with the perceived hassle of switching – as witnessed in the energy sector – may stifle consumer enthusiasm and result in cus- tomers not benefitting as they could. Consumer Council for Water chief executive Tony Smith said: "We are not convinced by many of the more positive assumptions that Ofwat has made in its analysis. In particular, we question how many water customers would be interested in switching supplier for such a small amount of money. "We are also concerned that large numbers of customers, particularly the elderly and others living in vul- nerable circumstances, may not par- ticipate actively in the market and that could cost them money." With the government and Ofwat looking favourably on competition, it seems as though the sector will have to work hard to retain the trust it has built up with customers, and to ensure that competition, when all forms of it go live, is successful. Water retail competition Competition in the non-domestic water retail sphere has been cumbersome and limited – but not for much longer. Scotland 1. Business Stream 2. Anglian Water Business 3. Aimera 4. Water 2 Business 5. Severn Trent Select 6. Veolia Water Projects 7. United Utilities Water Sales 8. Clear Business Water 9. Kelda Water Services (Retail) 10. Cobalt Water 11. Real Water Edinburgh 12. Commercial Water Solutions 13. Source for Business (Pennon Water Ser- vices) 14. Castle Water 15. Blue Business Water 16. NWG Business 17. Suez Industrial Water 18. Everflow 19. Sutton and East Surrey Water Services 20. Brightwater Services 21. Regent Water 22. Pure (CGV) 23. SSWB English retailers 1. Anglian Water Business 2. Business Stream 3. Castle Water 4. Cobalt Water 5. Clear Business Water 6. Kelda Retail – now part of Three Sixty 7. Northumbrian Water Business – now Wave 8. Severn Trent and United Utilities, on behalf of Water Plus 9. Source for Business (Pennon Water Ser- vices = SWW and Bournemouth) 10. South Staffs Water Business 11. Sutton and East Surrey Business Water 12. Thames Water Commercial Services (EXITED) 13. Water 2 Business – Wessex Water and Bristol Water Yet to be approved English retailers 1. Waterscan 2. Regent Water – a subsidiary of Regent Gas 3. Affinity for Business 4. South East Water Choice (sewerage licence only) 5. Invicta (Part of South East Water Choice) REGISTERED WATER RETAILERS STRUCTURE OF THE WATER MARKET Sludge disposal Water resources Sludge treatment Raw water distribution Sewage treatment Water treatment Sewage collection Terms of access Treated water distribution Retail services Retail services Customers Wholesale wastewater Wholesale water source: Oxera