Ofwat fires warning shots and urges more water retail market transparency

Ofwat has urged all players in the business water retail market to improve transparency and address a “lack of competitive intensity” in meter reading services. And the watchdog has fired shots across the companies' bows after research suggested anti-competitive behaviour.

In a letter to wholesalers and retailers the regulator has made recommendations – primarily directed at wholesalers – of means to “reinforce trust and confidence in the market.”

The recommendations sought to address various issues that emerged from Ofwat’s stakeholder survey in March this year. It said the survey responses included “allegations of wholesalers associated with a retailer treating their associated retailer and other retailers on different terms."

Ofwat senior director for customers and casework, Emma Kelso (pictured), said: “Poor interaction between wholesalers and retailers has a knock-on impact on customers and the quality of services they receive. Our recommendations call for the wholesalers to take immediate action to improve meter reading services by making these services more transparent to all market participants and customers."

Kelso said Ofwat would monitor wholesalers progress against its recommendations. And she reminded wholesalers of their obligations not to discriminate in favour of any allied retail operations, warning: “We expect to see significant improvement and if necessary, we will use regulatory tools if we believe there has been anti-competitive behaviour."

The Ofwat recommendations are:

  • to decrease administration costs and improve transparency for wholesalers and retailers, all wholesalers should state clearly and in a relevant area of their website if they offer meter readings or not;

  • to avoid potential competition issues, wholesalers should not renew the transitional service agreements for the provision of meter reading services still in place since market opening (if any);

  • to improve transparency, wholesalers who offer meter reading services should publish their standard terms and conditions on their website as best practice; and

  • to address potential complexity, costs and risks for retailers that may stem from a lack of industry standards concerning meter reading services.