Thames Water proposes to change smart metering policy for business retail customers

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Thames Water has proposed changes to how it replaces meters and offer free data services to retailers after an Ofwat investigation.

This is in addition to other formal commitments under the Competition Act 1998 to address concerns over the company’s approach to rolling out its smart metering programme in the business retail market.

In June 2019, Ofwat opened an investigation using its powers under the Competition Act 1998 (CA98) into the approach to smart metering adopted by Thames Water Utilities Limited (Thames Water) and the effect that this was having on third parties’ access to water consumption data.

Ofwat had concerns that Thames Water was breaching the Chapter II prohibition in the CA98, which prohibits conduct on the part of one or more undertakings which amounts to the abuse of a dominant position in a market within the United Kingdom.

Water consumption data is an essential input into some of the value-added services that retailers and third-party providers offer to non-household customers, including leakage detection, water efficiency and bill checking services.

Responses to Ofwat’s initial consultation in May 2021 were broadly supportive of commitments Thames Water had originally proposed.

However, they also highlighted that Thames Water’s smart metering policy was ‘not clear enough’ and that Thames Water needed to show it would engage more with customers and retailers when it was replacing meters so that they could continue to use their logging equipment.

Some respondents called for Thames Water to pay compensation for the harm it had caused. Issues were also raised with the prices of Thames Water’s data services. Ofwat challenged Thames Water to address the concerns raised.

The new commitments from Thames Water include more details on how it will meet customer requests for loggable meters, remove subscription charges for data services and provide compensation where it had lost or damaged logging equipment when replacing meters.

This will ensure that their actions do not harm competition within the market and will give retailers and third-party providers more confidence in the information they receive from Thames Water.

Ofwat opened the investigation because it was concerned Thames Water unfairly removed or limited access to water consumption data used by retailers and third parties – key information for detecting leaks, ensuring water efficiency and the accuracy of bills.

Ofwat investigated Thames Water following complaints that it had:

  • installed smart meters that were incompatible with data logging devices used by retailers and third-party providers;
  • removed other parties’ data logging devices when replacing meters with new digital smart meters; and
  • failed to offer access to data from its smart meters to retailers and third-party providers on fair, reasonable and non-discriminatory terms.

Ofwat considers that, when fully implemented, these modified commitments will address the concerns identified and proposes to accept them.

Accepting the commitments would result in the closure of their investigation, with no decision being made on whether the Chapter II prohibition has been infringed by Thames Water.

Ofwat is now consulting on the updated commitments proposed by Thames Water before making its final decision on whether to accept these and close its investigation.

If Ofwat decides to accept the commitments, Thames Water will have to report regularly to the regulator on their implementation.

More information about this consultation is available on the Ofwat website.

More information about this announcement is available on the Ofwat website.