Water regulator Ofwat has this week called on Anglian Water to explain the circumstances of its pricing for water and sewerage services at a new Milton Keynes development amid concerns by the regulator that it may “have abused its dominant position and infringed the Competition Act 1998”.
It has issued a Statement of Objections to Anglian Water over the Fairfields development, which is in Anglian’s supply area but is open to competition for water and sewerage provision. Potential new entrants must generally obtain upstream off-site supplies from the surrounding appointed monopoly company.
Commercial negotiations for the Fairfields site took place during 2007 and 2008, with Anglian and the developer signing an agreement in August 2008. Ofwat began its investigation after being contacted by potential alternative supplier to the site Independent Water Networks.
Ofwat said it considers that Anglian’s pricing for the Fairfields site “may have resulted in a margin squeeze and excluded competition” but added that “no assumption should be made at this stage that there has been an infringement of competition law”.
A final decision will be made after Ofwat has received and reviewed Anglian’s response. Anglian said the issuing of the Statement did not mean it had committed any infringement and it denied any wrongdoing and would contest the allegations “vigorously”.