Hundreds of thousands of supermarkets, hotel chains, hospitals and charities will be able to switch their water supplier from April next year in the biggest shake-up to the industry since its privatisation in 1989.
If granted a licence, larger businesses could even become players in the market, selling water to themselves in an effort to simplify administration and cut costs.
Companies and other entities in England and Wales interested in providing water services will be able to apply for a licence to start selling water from this month. After submitting an online application form and paying a fee of £5,250, successful applicants should able to begin trading in April 2017.
For example, a business in Yorkshire will be able to choose London’s Thames Water as their supplier, or a supermarket chain that operates all over the country could decide to have one water supplier for all their stores rather than many — thus having one bill rather than dozens.
Ofwat, the regulator, said businesses should benefit from lower bills and improved service as a result of the increased competition, as well as greater convenience and administrative savings.
Cathryn Ross, chief executive of Ofwat, said: “There is a lot of work still to do as we develop the largest competitive water retail market in the world. But opening Ofwat’s application process for retailers to apply for licences is a really significant and exciting step towards creating a successful market.”
The service has already been introduced for businesses in England that use more than five megalitres (5m litres) of water per year. But the new rules will enable an estimated 1.2m more businesses, charities and public sector organisations to shop around, the regulator said.
The industry is also consulting on whether to open the consumer market to competition, with a decision due by the summer.