Ofwat consults on Severn Trent proposal for customer swap with Dee Valley

Ofwat has been consulting over the December/January period on its proposal to vary the geographies served and the services provided by Severn Trent Water and Dee Valley Water. The proposals would see Dee Valley take on the provision of sewerage services and serve all Severn Trent’s existing Welsh customers with water and sewerage, while relinquishing its English water customers to Severn Trent.

The two companies have applied for variations to their supply areas under the consent criterion, following Severn’s acquisition of the Dee Valley Group in February 2017 (since when the companies have continued to operate under separate licences). At present, some 49,700 households and 4,000 businesses of Dee Valley’s 258,000 customers are situated in England, around the Chester area. Meanwhile, of Severn Trent’s 4.3 million customers, 35,100 households and 3,900 businesses are Welsh, situation in the Powys area.

Ofwat proposes to:

• exclude the Chester site from Dee’s area, adding it to Severn’s area instead. – the English company would take over the provision of domestic water services from Dee (it already provides wastewater services in the area), with Water Plus acting as Severn’s agent for business customers;

• exclude the Powys site from Severn’s area, adding it to Dee’s area instead; and

• grant Dee Valley a new appointment in respect of wastewater services to the Powys site, enabling it to act as a water and wastewater company there (wastewater customers in the rest of Dee Valley Water’s area would continue to be served by either United Utilities Water or Dŵr Cymru/Welsh Water as they are currently).

The regulator said it will notify stakeholders of its decision later this month, with any licence amendments granted taking effect from 1 April 2018.