Ofwat considers self-supply overhaul

Ofwat is considering an overhaul of the self-supply process, to make it simpler for businesses considering it as an option.

The regulator is consulting on a number of proposed changes,  informed by the first 10 months of the non-domestic water retail market to ensure the market is working effectively.

One proposal seeks to streamline and simplify the process for those exploring becoming a self-supplier, including reducing the fee for supply applications from £5,250 to £3,000. Currently self-supply applicants go through a process similar to those seeking a licence to become a retailer.

Ofwat believes the process could be “better tailored” to reflect the differences in the information the regulator does and does not need for self-supply licences.

Ofwat is also considering introducing an annual administration fee for self-suppliers, which it deems “necessary” to meet the costs of overseeing the market and ensuring it is working smoothly.

The consultations are open until 23 March and 3 April 2018, and Ofwat expects to set out a final position in April 2018.

The regulator is also consulting on a proposal to modify the standard licence conditions that apply to water supply and sewerage licences, including those limited to self-supply.

Emma Kelso, senior director at Ofwat, said: “For organisations looking to take advantage of the opportunities of self-supply in the new water retail market, we want to ensure that the process is as straightforward and seamless as possible.

“[The] consultations will help inform our work to ensure that the retail market is working to its full potential and delivering for both customers and suppliers.

“We think the process for applying for a self-supply licence should and could be simpler and cheaper. But we also think those with a self-supply licence ought to contribute to covering the ongoing costs incurred from this work. This is about being fair, transparent and reflective of the costs associated with the self-supply process.”

So far, five organisations have applied for self-supply licences in the English market.

In November last year, brewery and pub retailer Marston’s became the third company in England to be granted a self-supply licence by Ofwat, following brewer Greene King and hospitality firm Whitbread.

Coca Cola European Partners (CCEP) and Blackpool Council have both applied for licences which are yet to be granted.

Greene King, Whitbread, Marston’s, CCEP and Blackpool Council have all entered into partnership agreements with Waterscan.