Established water companies will be delighted to hear that Ofwat has decided to remove the in-area trading ban (IATB) from April onwards, allowing businesses to consolidate their in-area and out-of-area customers before the commercial water market opens in 2017.
This isn’t such good news for businesses looking to enter the market however, many of whom have campaigned against the decision claiming that it gives established companies an unfair advantage.
Ofwat assured them that any advantage will be mitigated by “other licence conditions” however, including compliance codes that all undertakers must have in place.
Ofwat said it has become necessary to remove the IATB before the opening of the market in 2017 as it stands in the way of the market design envisaged by the Water Act 2014.
“We have already engaged with stakeholders on our proposal and considered carefully the points made by those stakeholders on the removal of the IATB, particularly the points made by retailers currently operating in the Scottish non-household retail market, and we have concluded that it remains in customer’s interests overall for the ban to be removed in April 2016,” it added.
There will not be any practical effect of the removal of the ban in Wales though. Ofwat said it has met with the Welsh government and plans to hold a workshop on the application of the proposed market framework for small companies.