Ofwat has launched a new consultation on its proposals to make further modifications to self-supply licences in the run-up to the opening of the non-household retail market in 2017.
The regulator has already set out modifications to the standard conditions of the Water Supply and Sewerage Licences (WSSL), which self- supply licensees would be expected to operate in line with.
The new consultation gives stakeholders the chance to provide any final comments on the proposed modifications to the WSSL standard conditions following publication by the Secretary of State.
From April 2017 when the new retail market opens, all non-household customers who use the supply system and/or sewerage system of a water company whose area is wholly or mainly in England will be able to choose their retail supplier for both water supply and sewerage services.
A “self-supply licence” is a water supply or sewerage licence with a retail authorisation which authorises a licensee to supply its own premises and those of persons associated with it only.
Launching the consultation, Ofwat said, given that a self-supply licensee cannot supply other customers, there is a need to consider whether all of the standard conditions of the WSSL are required for those choosing to self-supply. For a self-supplier, the licence is necessarily restricted to the premises of the self-supplier itself and any associated entities.
Ofwat is now proposing to achieve this by making it clear that the licence is limited to particular entities. The regulator also intends to include a list of premises with the associated supply point identifier in a schedule to the licence which will be updated on an annual basis as necessary.
On the Customer Protection Code of Practice, while Ofwat has not proposed that self-supply licensees are excluded from the general obligation in the WSSL to comply with the Code, the parts which are not considered applicable for self-suppliers will be detailed in a schedule to the Code of Practice.
In terms of the application process for the self-supply licence, Ofwat said there will only be minimal differences to the standard process. However, the regulator intends to issue supplementary guidance for self-supply licence applicants which will make clear that self-supply licensees will also have to participate in the arrangements set out in the industry codes.
Self-supply licensees will need to make a trading application to MOSL, pass the market entry assurance tests and satisfy the industry code trading conditions e.g. provision of credit cover and agreement of the necessary contracts with wholesalers.
The regulator said it is proposing the amendments to the WSSL standard conditions in order to encourage possible entrants and ensure that it was not imposing unnecessary regulatory burdens.
Once the consultation has closed Ofwat will consider the responses and make any necessary changes to the proposed modifications. The proposed self-supply modifications to the WSSL standard conditions, together with the supplementary application guidance, will be made as soon as possible afterwards.
Deadline for submission of responses is Wednesday 4 May 2016 – click here to download the consultation paper.
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