Press Releases 2008

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Water Industry Commission for Scotland begins process to revoke Aquavitae's licences to trade – but customers still benefit from new market

03 July 2008

The Water Industry Commission for Scotland (WICS) yesterday agreed that it was minded to revoke Aquavitae’s licences as a response to the company entering administration. But the Commission also sees increasing signs that customers are benefiting from the new market arrangements.

A licensed provider which enters into administration is classed as a defaulting trading party and may have its supply points transferred to other licensed providers. Accordingly, the Central Market Agency reallocated Aquavitae’s remaining customers to other licensed providers on 21 June 2008. Scotland’s new market arrangements have, therefore, ensured that Aquavitae’s former customers were protected.
 
WICS Chief Executive Alan Sutherland explained the Commission’s decision: “Aquavitae going into administration was a clear breach of market rules and as a consequence we have made the decision to begin the process of revoking its licences to trade.

Regulators must be transparent and targeted in their actions.  It would therefore have been wholly inappropriate for the Commission to act prior to there being clear evidence of a breach of the market rules.  No customer has gone without a quality water and waste service as a consequence of Aquavitae’s entry into administration.  This, in itself, is evidence of the robustness of the new market arrangements. The Commission will continue to ensure that customers can safely exercise their right to choose supplier in order to obtain better prices or better levels of service.

“It is important to emphasise that customers in Scotland continue to benefit from the competition framework for water and sewerage services – over a quarter of Scottish businesses are already better off and are paying lower prices.  More generally, the Scottish water industry has markedly improved its level of service and reduced its costs in response to the introduction of competition.”

WICS has written to Aquavitae giving the reasons for its decision and inviting the company to make any representations it may have within the next 30 days. If, having considered any such representations and any other relevant circumstances, the Commission still considers it would be reasonable to revoke Aquavitae’s licences, it will serve the company with a notice of revocation.

This notice of revocation will include the date on which revocation will become effective and Aquavitae will have 14 days from service to appeal.  If no appeal is forthcoming then the revocation will become effective and the Water Industry Commission for Scotland will publish a revocation notice, update Scottish Ministers and Scottish Water, and update the register of licences.

Ends

For more press information:
- Arthur Browne or Julie Fourcade, 3 Monkeys Communications, 020 7440 2410 / 07906 488 614 / 07958 736 056 ([email protected] / [email protected])
- Katherine Russell, WICS’ Director of Corporate Affairs, 01786 430 200

Notes to editors:

1. From 1 April 2008, all business customers and public bodies, such as, local authorities, hospitals, schools etc are eligible to switch water supplier. The framework for competition is set out in the Water Services etc. (Scotland) Act 2005. The 2005 Act requires WICS to establish a regime to license new entrants into the market, and facilitate the orderly opening of the market. It also required Scottish Water to establish a separate retail entity (now Business Stream) to serve non-household customers in Scotland.

2. The process of reallocating supply points registered to a licensed provider that departs from the market is administered by the Central Market Agency under the terms on the Market Code. More information on this process and the market structure in general is available at www.watercommission.co.uk.

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