Scottish and Southern Energy (SSE) has been granted permission to enter the UK's water market by regulator Ofwat.
The approval means the energy supplier will become the UK's first new domestic water company for almost 20 years when it installs, operates and maintains its own water network for a housing development in Salisbury.
Commenting on the permission, SSE's chief executive Ian Marchant claimed the move was massive for the energy supplier.
He said: "It is an evolutionary step in the development of our business and also means competition in the water industry in England and Wales is continuing to make progress.
"Our existing gas and electricity customers expect and receive the best customer service in the industry. SSE is committed to delivering the same excellence to our new water customers."
SSE's efforts to enter the domestic water market have been a major talking point in the past few days, with uSwitch.com's head of home services Tim Wolfenden describing the move as "a test of how competition could be injected into the market in the future".
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