Citizens Advice has responded to proposals from Ofwat, the water regulator, to open up the energy market to competition between firms.
Currently, households have no choice in which water company supplies them. Under the proposals, firms could buy water in batches from existing providers and sell it on to households, potentially in bundles with energy and electricity.
Gillian Guy, chief executive of Citizens Advice, said:
“Lessons need to be learnt from the energy market to make increased competition between water firms work for people paying the bills.
“Competition can be effective in driving down prices and improving customer service, but as we have seen in the energy sector, regulators need to pay it close attention to stop problems developing, from inaccurate bills to unclear prices.
“If companies decide to bundle water together with energy and gas, this could bring down prices – but it could also make it harder for people to get a better deal through switching, which would undermine the aim to cut costs for consumers. It needs to be clear how much each part of a bundled service costs, so that people can easily compare prices.”