Important Market Changes - April 2012
New arrangements have been established to allow suitably accredited entities to undertake various activities in Scotland. The scope of the activities is:
- New Connections
- Temporary Disconnections and Reconnections
Under the arrangements, participating Licensed Providers (LPs) in the case of new
connections to non-household premises, or Developers in the case of new
connections to household premises, may instruct an accredited entity to undertake
the water connection and, where applicable, the installation of the associated
revenue meter. Similarly, the LP may instruct an accredited entity to undertake a Temporary Disconnection or Reconnection on their behalf.
Competition in the Water Industry in Scotland
Legislation has established a legal framework for retail competition in the water industry in Scotland for non-household customers. The Water Industry Commission has a duty under the legislation to licence entrants into the market.
Since April 2008 Licensed Providers have entered the commercial market and offer services (provision of water and waste water, billing and invoicing, customer service, complaints handling) to non-household customers.
Scottish Water acts as the Wholesale Supplier in the market and provide water and waste water services in bulk to Licensed Providers on an equal footing.
Codes and Agreements – Market Framework
In regulated utility industries, codes that set out the rules and principles of the competitive market are often used. Market participants are required to sign up to and comply with these codes. This allows the market to develop more flexibly because it avoids the need for frequent changes to licence conditions.
The following codes and agreements for the non-household retail market are in existence.
Wholesale Services Agreement (WSA)
The WSA is a legally enforceable contract between the wholesaler (Scottish Water) and a licensed service provider (for example, Satec or Business Stream).
The WSA covers the water or sewerage services that Scottish Water agrees to provide to licensed service providers, and the commercial terms on which those services are provided.
The operational code sets out the processes for dealing with day-to-day operational matters. The purpose of the operational code is to facilitate effective coordination between Scottish Water and licensed service providers. The requirement for this coordination arises due to the separation of wholesale and retail activities. The Operational Code is available to download from the Wholesale page.
The operational code focuses on procedures and rules relating to:
- connections to the network (e.g. the information required to plan for a connection),
- network planning (e.g. the publication of long-term plans), and network
- operation (e.g. metering processes),
- complaints handling (e.g. the time taken for handling complaints), and
- emergencies (e.g. responsibilities for providing customers with information).
Click here to download the Operational Code (pdf).
The market code sets out the rules to be followed by all the participants in the retail market. The purpose of the market code is to contribute to the creation of an effective market i.e. one in which market forces determine entry decisions and switching decisions. The market code defines:
- the processes that govern how non-household customers switch from one
- licensed provider to another,
- the processes that allow Scottish Water to levy wholesale charges on each Licensed Provider.