Water industry regulator Ofwat has published new guidance for assessing which businesses and other non-household customers in England and Wales will be eligible to switch water and wastewater suppliers when the competitive market opens for business in 2017.

According to Ofwat, the new market will be the largest retail water market in the world and deliver about £200 million of overall benefit to the UK economy. Introducing the new guidance, the regulatorsaid customers will be able to shop around and switch to the best deal, investors and retailers will have new opportunities for growth and the environment will benefit from customers using new water efficient services.

Ofwat described opening the new market as a “complex challenge” but said it is currently on track to open in April 2017. The design is almost complete and work is now being carried out to deliver the technical systems, checks and ways of working that are needed to get the market right for customers.

One of the areas of work is providing guidance on determining which customers are eligible to switch retailer. The guidance explains how to assess whether a customer’s premises are eligible to be supplied by a licensee. It includes information on:  what constitutes a single set of premises;  premises that are likely to be household premises and non-household premises for the purpose of the licensing framework; and  how to decide whether the threshold requirement is met.

The guidance says that following the commencement of the relevant sections of the Water Act 2014, the following requirements must be satisfied in relation to each of the premises supplied by a licensee:

• The customer’s premises are not household premises.
• In all cases and for all aspects of eligibility, the licensee rather than the appointed water company must ensure that the premises of a potential customer are eligible.

With regard to premises in the supply area of an appointed company located wholly or mainly in Wales, when the licensee first enters into an undertaking with a customer to give the supply, the total volume of water estimated to be supplied to the premises each year by the licensee is not less than 50 megalitres– Ml (the ‘threshold requirement’).

The latter requirement currently applies to premises in the supply area of an appointed company located wholly or mainly in England as well, albeit with a threshold of five megalitres a year.

The guidance also says that unless doing so in pursuance of an appropriate licence, it is a criminal offence for a person to:

• use an appointed water company’s supply system for the purpose of supplying water to any premises of a customer; or
• introduce water into an appointed water company’s supply system

Similar offences will also be introduced for the illegal use of wastewater systems without an appropriate sewerage licence.

In addition, any licensee that provides services to non-eligible premises could face enforcement action by Ofwat and may incur financial penalties. Alternatively, a licensee could face having its licence revoked under the terms of its licence.

Ofwat is advising that licensees or prospective licensees should seek their own legal advice if they are unsure whether a customer’s premises are eligible.

Click here to download the guidance document Guidance on assessing whether customers in England and Wales are eligible to switch their water and wastewater retailer