Bristol Water has moved in advance of the outcome of an investigation by water industry regulator Ofwat into concerns about the utility’s anti-competitive behaviour against self-lay organisations.
Ofwat launched a formal investigation in March 2013 into the price and non-price terms Bristol Water applied when providing services to self-lay organisations (SLOs) in response to two separate complaints.
The complaints related to the services provided by Bristol Water to enable the provision of new water infrastructure for new development sites, either by itself or by self-lay organisations. The complainants alleged that Bristol Water had used its dominant position to harm competition in the contestable market of providing new water infrastructure for new developments, making it difficult for self-lay organisations to operate in Bristol Water’s area.
Bristol Water has now offered to make changes to both its structure and processes in response to the specific competition concerns identified by Ofwat - including a clearer separation of Bristol Water’s downstream developer services functions, which operate in a contestable market, from its non-contestable upstream services.
Ofwat said that the case raises issues of strategic significance for the industry, given that services for new water connections infrastructure is currently one of only a few areas of competition in the water and sewerage industry.
The alleged conduct is also connected to issues around ensuring a level playing field for appointed water companies and new entrants alike, in so much as it deals with potential discriminatory behaviour by a vertically integrated company that could have an adverse effect on competition in a competitive market.
The level playing field issues raised by the case will grow in importance as more competition occurs in the sector as a result of the new Water Act 2014.
Ofwat has today opened a consultation on its intention to accept the binding commitments proposed by Bristol Water under the Competition Act 1998.
Ofwat’s consultation, which runs for eight weeks until 18 July 2014, seeks views from interested parties on the appropriateness of Ofwat accepting the commitments offered by Bristol Water.
Click here to access the consultation document
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