The European Policy Forum’s roundtable event earlier this week (20.02.12) showed a welcome consensus that the Water White Paper has set a clear direction of travel and that non-household customers should indeed be able to choose their supplier.
Obviously, we are pleased that the Westminster Government has taken this decision. It is no secret that we have argued that such an initiative would benefit all customers – not just the non-household customers who will be able to choose their supplier. Our view was and remains that customers in Scotland would benefit by being able to choose between more and more active retail providers. We are also aware that many multi-site customers would ideally want a single bill across Great Britain. The Westminster Government's decision should now make this possible.
We very much welcome the proposal to establish a quadripartite steering group to achieve a market framework that will allow customers across England and Scotland to benefit from the new arrangements. However, we do think that this group should be quintipartite and include company representation. Clearly, if this were to be achieved in an effective and manageable way, the companies would have to settle on one or perhaps two representatives at most.
Our role in this Group would be principally to share our experience of having implemented a well-functioning, but imperfect, market framework. We would also be concerned to ensure that any new Anglo-Scottish arrangements work at least as well as what we have in place just now.
Some appear to believe that the Commission’s intention is to ensure the imposition of a Scottish model in England. It is true that the arrangements are made easier by having a single wholesaler – but I am confused why the public sector ownership of the wholesaler is an issue in the development of a framework. If a Scottish model were to involve a single operating code, a single market code etc. being introduced in England and Scotland, this is certainly not something that I would advocate.
Indeed, my view is that each regional water company – which inevitably will have different wholesale charges – may well seek to interact with the new retailers in different ways. Unless we plan on insisting on the same service levels being offered everywhere, it will be necessary to have different operational codes for each wholesale company. There may be much that is common – indeed they may become more common over time (as happened in electricity distribution) but that will not be the starting point.
This leads to the debate on settlement and registration systems. I can understand how, if England were to adopt a single system to handle all of the companies and all of the retailers, these systems could become very complicated, very quickly. I would certainly not advocate such an approach – the only winners are likely to be IT companies! But that does not mean that there could not be centrally managed but separate registration and settlement systems.
From a Scottish perspective, we will happily change our arrangements and bring them in line with England once these arrangements are well established and proven to be working at least as well as those in operation in Scotland. But there is a lot of implementation work to be done between now and then!