Ofwat has launched a new consultation on its final proposals for protecting customers in the non-household retail market and a draft customer protection code of practice.
Introducing the consultation, the regulator said the new market, which will enable around 1.2 million eligible businesses and other non-household customers to be able to shop around for their water retailer, is on track to open in April 2017.
The consultation paper says there are currently a range of regulatory protections for non-household customers that may continue in the new retail market and new arrangements under development, including:
- in line with the new legislation, Ofwat is proposing to extend the Guaranteed Standards Scheme (GSS) to ensure that minimum service standards are enjoyed by all customers in the new market, not just undertakers’ customers;
- this year Ofwat will undertake changes to the non-household retail price control arrangements beyond 2017. While licensees will not be directly price controlled at this time, the retail exit code extends some of the price control protection to transferred customers and small and medium sized businesses, at least in the early years of the development of the market.
The design for the market is almost complete and work is now being carried out to deliver the technical systems, checks and ways of working that are needed to get the market right for customers. Ofwat said a key element of this will be to ensure that non-household customers are appropriately protected in the retail market, commenting:
“The best protection for customers will be an effective set of market arrangements that drive high levels of competition among suppliers. However, the experience of retail or ‘supply’ markets in other utilities suggests that some additional regulatory protections may be needed for some customers in certain circumstances.”
The consultation paper also sets out how the code of practice will be implemented and the associated change management arrangements governing how the code could be amended in future. Ofwat expects the code to be given legal force through a licence obligation on both Water Supply and Sewerage Licensees (WSSLs) and appointed companies.
Looking ahead, Ofwat said it recognised that in a number of instances it would need to monitor how the market is developing to understand if the protections are working, or if they need revisingnor removing entirely because they are unnecessary. The regulator intends to take this forward as part of a broader exercise to develop and understand the arrangements needed to monitor the effectiveness of the new market- Ofwat plans to explore these areas in quarter 2 and quarter 3 of 2016-17.
Deadline for submission of responses to the consultation is 15th April 2017 - Click here to download Protecting customers in the non-household retail market – a consultation on final proposals and a draft customer protection code of practice
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