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The reality of household retail competition in water
Source: Global Water Intelligence (GWI)
Ofwat chief executive Cathryn Ross yesterday affirmed that we are at the “end of the beginning of the competitive market”, despite numerous speakers at Moody’s annual water conference outlining the potential pitfalls of introducing household competition into the English water sector.
Moody’s senior analyst Stefanie Voelz drew attention to the counterparty risk which would ensue as investment-grade wholesalers engage with retailers whose stand-alone creditworthiness could remain in junk territory as a result of exposure to household bad debts.
Tony Smith, the chief executive of CCWater, grappled with the unquantifiable benefits of empowering household customers to switch retail supplier, whilst pointing to a survey which found that only 5% would be likely to switch, even given the savings on offer under Ofwat’s most optimistic scenario.
Craig Lonie of Oxera, meanwhile, warned that the projected benefits of household retail competition would simply not accrue to the same degree without significant customer engagement.
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