Ofwat is consulting on a number of proposals relating to self-suppliers in the water retail market – the regulator has published three separate consultation documents seeking stakeholder comment.
Launching the consultations, the regulator said the proposed changes had been informed by the first ten months of the competitive water retail market for non-household customers in England and seek to help ensure that the market is working effectively.
Licensees limited to self-supply can only supply their own sites and the sites of people or companies associated with them. Licensees limited to self-supply are not able to supply retail services to third-party sites.
Key objectives Ofwat is seeking to achieve include:
- Ensuring the licence fee does not act as a barrier to new entrants joining the business retail market
- Ensuring there is no cross-subsidisation of the business retail market in England by Welsh customers;
- Minimising complexity, cost and uncertainty
One proposal outlined today seeks to streamline and simplify the process for those exploring the option of becoming a self-supplier, including reducing the fee for supply applications from £5,250 to £3,000.
At present, self-supply applicants must go through a process very similar to those seeking a licence to become a retailer. The consultation paper says:
"We believe it may be difficult for potential applicants to fully understand the application requirements for a WSSL limited to self-supply."
Ofwat believes the process could be better tailored to reflect the differences in the information the regulator does and does not need for self-supply licences.
Ofwat is also looking at the case for introducing an annual administration fee for self-suppliers. This is deemed necessary in order to meet the costs of overseeing the market and ensuring it is working smoothly and effectively for both suppliers and customers alike.
Ofwat is also consulting on a proposal to modify the standard licence conditions that apply to WSSLs (including those WSSLs limited to self-supply)
Ofwat Senior Director Emma Kelso said:
“For organisations looking to take advantage of the opportunities of self-supply in the new water retail market, we want to ensure that the process is as straightforward and seamless as possible. Today’s consultations will help inform our work to ensure that the retail market is working to its full potential and delivering for both customers and suppliers.
We think the process for applying for a self-supply licence should and could be simpler and cheaper. But we also think those with a self-supply licence ought to contribute to covering the ongoing costs incurred from this work. This is about being fair, transparent and reflective of the costs associated with the self-supply process.”
The consultations are open until 23 March and 3 April 2018. Ofwat expects to set out a final position in April 2018.
Click here to download Proposal by Ofwat to revise the application process for Water Supply and Sewerage Licences limited to self-supply
Click here to download Proposal by Ofwat to modify the standard licence conditions that apply to water supply licences and sewerage licences
Click here to download Water Supply and Sewerage Licensing Regime – consultation on proposed changes to how licence fees are set
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