Retail exits reform: draft regulations

Overview

The Water Act 2014 (WA14) introduces reforms that will allow the water sector to achieve increased resilience, increased customer choice and support economic growth. These include changes that will allow more competition in the retail market for non-household water and sewerage services. 'Retail’ services incorporate all customer-facing activities such as billing, meter reading and dealing with enquiries. These are distinct from the ‘wholesale’ or ‘upstream’ activities involved in sourcing, transporting and treating water and waste water. Our reforms will allow all businesses, charities and public sector organisations to switch from their local monopoly water company (the “undertaker”) to another supplier of retail services (the “licensee”) when the retail market opens in April 2017.

During the passage of the Water Bill through Parliament, the Government brought forward amendments designed to allow undertakers to cease to offer retail services to non-household customers – this is known as “retail exit”. These enable the Government to introduce regulations that will allow retail exits to take place.

Following Royal Assent of the WA14, we have worked closely with the water industry, consumer groups and the regulator to develop the policy on exits. We consulted on the policy content of the draft regulations in December 2014.

Why your views matter

We are now seeking views on the draft regulations and exit application process. The draft regulations can be found below along with a consultation document. This document provides an introduction to the draft regulations through summarising the policy objectives which we are seeking to achieve through them and flagging points which may be of particular interest, or where there are still choices to be taken. The consultation document also includes a draft exit application form which water companies will use to apply to exit the market.

We have also published a summary of responses to the December 2014 consultation on the policy content of these draft regulations alongside this consultation and a link to this can be found below.

Please read the consultation document and draft regulations before responding. You can submit your responses through using the online survey. Alternatively, you are also welcome to submit your responses by email or post using the contact details below.

Email: 

RetailExitsConsultation@defra.gsi.gov.uk

Post:

Retail Exits Consultation,
Defra Water Reform team,
Area 3B, Nobel House
17 Smith Square
London
SW1P 3JR

What happens next

Once the consultation has concluded, and we have amended the regulations in response to feedback, we will send the draft regulations to the Environment, Food and Rural Affairs Select Committee and other interested Parliamentarians. This will provide them with the opportunity to comment on them before they are finalised.

We will subsequently lay the regulations in Parliament in May 2016 under the affirmative procedure. This will allow further Parliamentary scrutiny. The regulations, subject to Parliamentary approval, will come into force so as to allow for the submission of exit applications from 3 October 2016 and to allow retail exits to take place from market opening onwards.