Ofwat is consulting a further package of measures aimed at protecting business retail customers and minimising disruption in the market as the coronavirus emergency continues.
Launching the consultation on the proposed measures, the water industry regulator said the business water retail market in England will inevitably be affected, both through businesses closing and as social distancing affects retailer operations.
Ofwat has already worked closely with the market operator MOSL to put urgent retail code modifications in place at the end of March. The changes were intended to ensure businesses affected by COVID-19 are not being pursued for non-payment of water bills, to minimise the disruption that retailer failure could cause to business customers and the trading parties who are operating within it.
The modifications included:
- restricting retailers from charging interest or late payment fees for late payments or requesting that customers be disconnected at this time;
- deferring payment of a proportion of wholesale charges to reflect late payment by non-household customers; and,
- use of a temporary vacant flag in the market database to reflect that a closed business is not consuming water.
Ofwat has explained that the code modifications on wholesale charge deferral are an interim solution – the regulator and MOSL have been considering a package which would be more enduring.
The regulator has today launched a consultation on the new measures to protect the interests of customers and is seeking feedback on the following proposals:
A potential code modification to continue to provide liquidity to retailers for a further defined period of time
- The option of a cap on retailer bad debt exposure
- The option of a cap on wholesalers from bad debt exposure following any potential exit of a retailer from the market.
The consultation is running on a tight timescale – deadline for stakeholder views on the questions detailed in its consultation is 5pm on Tuesday 21 April 2020.
Ofwat offices are closed for the time being and the regulator is currently unable to accept responses by post.
Stakeholders are asked to submit email responses to This e-mail address is being protected from spambots. You need JavaScript enabled to view it , with the subject “Liquidity and bad debt Consultation”.
Click here to access the consultation document
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