SSE in talks to supply water to business

SCOTTISH & Southern Energy is in talks with Scotland's water watchdog, which is drawing up licences for private firms to compete with state-owned Scottish Water for business customers.

The licences offer favourable terms to firms supplying business customers.

High water charges are a perennial complaint from Scottish companies, which have seen charges increase by an average of 129 per cent in the past decade. Some business have been told that they face a five-fold hike in effluent charges from next year.

Under chief executive Ian Marchant, SSE is known as a cost-cutting competitor in the electricity and gas markets and its intervention is expected to push down the price of water for business users. SSE recently applied for licences to sell water in England and Wales.

The Scottish Executive drew up plans for a free market for non-domestic water as an alternative to full privatisation. It is intended to put pressure on Scottish Water to be more transparent about its costs and to become more efficient, benefiting domestic and business customers. Water retailers, such as SSE, will buy water from Scottish Water on terms agreed with the Water Commission.

SSE, along with ScottishPower and other companies including Thames Water, is a member of the Water Industry Commission's Licensing Framework Implementation Group (LFIG), which will decide how the market for water will work.

Other LFIG members include the English suppliers Anglian Water and United Utilities, the water treatment company Satec, and two divisions of Scottish Water.