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South East Water will not be able to offer water services nationally in the competitive market under its current licence but has opted to apply for a sewerage licence only, instead of a new water supply and sewerage licence.
The sewerage licence, which the company announced it had applied for on 3 August, would enable the water-only company to offer sewerage services to business customers nationanwide. However, it will still only be able to offer water services within its existing water supply licence area.
‘South East Water Limited’ is not able to apply for a full water supply and sewerage licence (WSSL). This is because under the amended Water Industry Act, water undertakers cannot hold a WSSL for water. To do so, South East would need to establish a separate company and apply for a water WSSL for that company – as others have done.
However, South East confirmed it had only applied for the sewerage licence to enable it to provide a single bill for both water and wastewater within its current area.
A spokesperson for the company told Utility Week: “We are considering opportunities for the future but initially our focus is on ensuring our current customers can receive an enhanced service from us.”
WSL licences are not transferable to become WSSLs. They are two separate licensing regimes with different customer eligibility criteria. So any WSL holder that wishes to operate in the market after April 2017 will need to apply for a WSSL licence.
Ofwat told Utility Week that, as a water-only company, South East Water will be able to offer water retail services in the new market within its existing service area under its existing instrument of appointment.
If its sewerage licence application is successful, then it will also be able to offer sewerage retail services both in its existing service area and to other eligible customers.
However, if South East Water wishes to supply water retail services outside its area of appointment, it will need to make an additional WSSL application for a water licence, through a newly-established company.
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