Ofwat has confirmed its provisional decision to accept binding commitments by Thames Water to address competition concerns the regulator had identified during its investigation into the water company’s introduction of smart water meters at business premises.

Concerns had been raised about Thames’ approach to smart metering and the effects that this was having on business customers, retail water companies (retailers) and third party providers (TPPs) offering value-added services to business customers and/or retailers.

Ofwat’s investigation had identified that Thames Water had installed smart water meters that could not having logging equipment attached to them and had failed to provide alternative access to the water usage data it gathers from the meters on what the regulator described as “fair, reasonable and non-discriminatory terms.”

Ofwat said this had the effect of withdrawing access to water usage data for existing users and denying access to that data for those who may wish to access it in future. Water usage data is used to monitor a customer's water consumption and can be used by retailers and TPPs to provide value-added services such as leakage detection, water efficiency services and bill validation services to business customers.

In February 2022 Ofwat outlined its provisional view that the commitments addressed its concerns by:

• committing Thames Water to installing digital smart meters that are compatible with logging devices (where requested to do so by the retailer or their business customer);
• making improvements to the digital data services (DDS) that it offers to retailers as a means of providing them with water usage data;
• offering the DDS for free once initial set-up costs have been paid by the customer

Ofwat has also agreed to a request from Thames Water that it be permitted to amend the delivery dates for five of the individual commitments because of delays caused by contractual discussions with some of its suppliers and Ofwat’s decision to consult on the modified commitments.

Commenting on its decision, Ofwat said:

“We are satisfied that this is an appropriate case in which to accept commitments. The Final Commitments address our competition concerns and lead to a good outcome for business customers and the market as a whole. They are also capable of being implemented effectively and we will be able to identify if they are being complied with.”

The regulator has closed its investigation and has made no final decision as to whether or not Thames Water's conduct amounted to an infringement of the Chapter II Prohibition.

However, acceptance of the Final Commitments does not prevent Ofwat from taking any action in relation to competition concerns which are not addressed by the Final Commitments. Ofwat is also not prevented from continuing its investigation, making an infringement decision, or giving a direction in circumstances where it has reasonable grounds for:

• believing that there had been a material change of circumstances since the Final Commitments were accepted;
• suspecting that a person had failed to adhere to one or more of the terms of the Final Commitments; or
• suspecting that information which led us to accept the Final Commitments was incomplete, false or misleading.

Click here to download Ofwat’s Final Decision document in full