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how the market will work

Businesses and other non-household customers will be able to shop around for their water and wastewater retailer like they do for other goods and services. Retail suppliers will compete for customers by offering them the best deal.

Eligible customers can renegotiate or shop around now – but they will not actually switch until the market opens in April 2017. Unless customers switch, they will stay with their existing supplier.

who is eligible?

Business and other non-household customers in England who use more than 5 million litres of water a year can already choose their water company. When the market opens in April 2017, the UK Government has estimated that about 1.2 million more customers will become eligible to choose their retail service supplier and shop around to get the best deal.

A small number of eligible customers are in Wales.

Eligibility will largely depend on:

  • whether premises are used mainly for business, rather than domestic use
  • where an existing water and/or wastewater supplier is based

Use our eligibility guide to find out whether your business is eligible.

the costs and benefits of the Open Water market

The Open Water market will be the largest retail water market in the world.

The UK Government has estimated that opening the market to competition could deliver more than £200 million in overall financial benefit (total benefits minus total costs) to the UK economy.

This includes:

  • lower bills, mainly as a result of better water-efficiency
  • improved service standards
  • more tailored services to better suit individual business needs

Opening the water market will also benefit the environment too.

Find out more about the benefits of the market


supplying retail services

In order to become a retailer – or for a customer to supply themselves with retail services – businesses must complete a simple, three stage process:

  • Stage 1 – apply for a licence on the Ofwat website, which includes complying with market codes and other obligations
  • Stage 2 – undergo a process of assurance and technical checks run by the Market Operator. You can find out more about these checks on Market Operator Services Limited’s (MOSL) website
  • Stage 3 – buy wholesale services and win customers (or supply yourself)

how customers will be protected

Customers will be protected in a number of ways once the market opens.

One of the advantages of a competitive market is that if you are unhappy with your retailer, you can switch to a new one – depending on the length of your contract.

  • If you decide to stay with your existing supplier there is a maximum price (known as a default tariff) they can charge you for a standard level of service – this is known as a deemed contract
  • All retailers have to deliver some basic guaranteed standards of service (known as GSS) and they will have to pay you a set amount of money where they fail to meet them
  • Retailers will have stick to rules that, for example, mean they must give you clear information in your contract and not mis-sell you services
  • When you switch for the first time you will receive a formal contract of the price and services you will receive. This has the same legal protections as any other agreement for the supply of goods and services

The economic regulator (Ofwat) can take action against suppliers who breach the licence terms. For example, Ofwat can impose fines and revoke licences.

If your supplier chooses to exit the market or goes out of business, there will be arrangements to make sure you continue to receive services.

making Open Water work

There are a number of organisations involved in making the market work.

The Open Water programme was set up by the UK Government to deliver the competitive market by April 2017. The key organisations responsible for delivering the new market are Defra, Ofwat and MOSL.