This means that more than 1,000 more large users in England can choose to change the water and sewerage company that supply them.
The threshold for large user inset appointments has decreased from 250 megalitres of water a year to 100 megalitres.
Beryl Brown, OFWAT's Head of Competition Policy said, "OFWAT welcomes the lowering of the inset threshold. Opening up market competition means that customers can exert pressure on suppliers."
(Source: OFWAT Office of Water Services)