Ofwat clarifies business customers can be put on charging trials

Ofwat is consulting until 8 August on explicitly allowing water companies to run charging trials for business customers.

Since April 2023, it has been clear under Ofwat’s charging rules that household charging trials are permitted. Although Ofwat stated in a September 2022 consultation that business customers could also be subject to trials, it said stakeholder engagement had suggested that the absence of a specific wholesale charging rule permitting such trials was creating confusion about whether business customer trials were allowed. “Therefore, we want to make it clear that water companies can trial new charging structures which could result in different charging approaches for the same class of business customers during the duration of the trial.”

In a related change, Ofwat is consulting on requiring water companies to publish statements of significant changes when they publish their final wholesale charges each year (by 13 January). Firms would need to set out what the changes are, which customer groups are likely to be affected, and what handling strategies are in place. Ofwat noted that since companies already prepare such statements at the indicative stage, “we do not consider that this will impose a significant additional burden”.

The changes come as part of a broader consultation on ‘small updates’ to Ofwat’s charging rules.