What are default water rates?

Since the process of deregulation in 2017, enterprises have been provided with the option to transition between various water suppliers for their business needs. This allows them to establish an agreement with any available supplier in the market to secure a fixed and reduced retail rate.

A significant majority of businesses across England have yet to make the switch to a different supplier. Consequently, they continue to be subject to the “default water rates” offered by the default water supplier operating within their respective geographical area.

The default water supplier for each region publicly displays their default rates on the internet. To ensure fair practices, Ofwat, the regulatory body, exercises stringent control over these default retail rates. This includes implementing a price cap that functions as a safeguard for businesses that have remained with their initial supplier and have not pursued the option to switch.

Typically, the default water suppliers tend to charge the maximum permissible amount as dictated by the default price cap. Hence, the determination of this price cap holds direct significance for the majority of businesses, given their reliance on default water suppliers.