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Reformed Water Act

23rd May 2014

Reformed Water Act opens up competition in the market

The Queen via Royal Assent has formally agreed to put through the UK Water Act so that it becomes law, ending a two-year process, with the reform proposals initially published in July 2012. It’ll be the most significant reform to the water industry since it was privatised in 1989.

The Act will help join up the national water network, making it easier for water companies to buy and sell water from each other, which will increase competition and encourage new entrants to the market.

The Act will:

  • address growing pressure on water resources by making our supply more resilient through new companies offering new sources of water
  • help join up the national water network, by making it easier for water companies to buy and sell water from each other
  • increase competition and encourage new entrants to the market who can offer alternative sources of water or innovative ways of treating sewerage, and
  • ensure that hundreds of thousands of households in the highest flood risk areas will be able to access affordable flood insurance from 2015.

 Source: www.gov.uk/government/news/water-act-gains-royal-assent

Its main provisions include the introduction of competition in the retail market for non-household water and sewerage customers, which will make it easier for business customers to 'shop around' forproviders to find the best deal. It’ll also bring changes to 'upstream' water and sewerage services to making it easier for new suppliers to enter the market.

Environment Secretary Owen Paterson, on the Government Website said:

‘We are building a stronger, more competitive economy and our new reforms to the water market will continue to support that long-term plan. This new law gives businesses the freedom to switch supplier. This will bring real competition into the market, so businesses can seek out the most competitive deal and save money.’

Alongside these wider reforms, the Act also introduces changes to the regulation of the water sector including separate price controls for wholesale and retail businesses. Separately, a new, outcome-focused risk based approach to regulation (RBR) will put more emphasis on water companies engaging fully with their customers, and encourage operators to become less dependent on the regulatory framework.

Source: www.gov.uk/government/news/water-act-gains-royal-assent

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