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Bournemouth Water’s licence will be terminated and South West Water’s licence varied to include the Bournemouth area, under new proposals set out by Ofwat.
The regulator said the proposal was made with the support of the boards of both South West Water (SWW) and Bournemouth Water.
The Bournemouth/SWW merger was given the final go-ahead by the Competition and Markets Authority (CMA) in November last year.
The SWW board had originally pledged to continue to report separately on the regulatory performance relating to the South West Water and Bournemouth Water areas until at least 2020. However, Ofwat has now said separate reporting will only be required for the two areas when necessary for the regulator and other stakeholders. “This will be a transitional provision up until 31 March 2020,” it said.
The regulator pointed out that Bournemouth’s licence contains the most up-to-date suite of ring-fencing conditions – which help make sure that the company and its customers are protected from adverse impacts from the wider group – although SWW’s does not. It will modify SWW’s licence accordingly.
“However,” it added, “having worked with South West Water, we are proposing to do this in a different way from the approach we have previously taken. We intend this to be a blueprint that will eventually be rolled out for other companies.”
Ofwat is consulting on its proposals until 14 March 2016.
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