Ofwat to review credit arrangements for the business retail market
Ofwat has launched a review of the market codes which set out the credit requirements for retailers in the new business retail market.
At present, retailers can choose to pre-pay wholesalers for the water their customers use or they can choose to post-pay which includes providing a form of credit. This form of credit must cover the cost of supplying their customers for 50 days. If they don’t have the means to do this, wholesalers can choose to no longer work with the retailer.
Some have asked if the current requirements are too stringent and could dissuade smaller, new entrants from competing in the market. To make sure the market is effective, Ofwat wants to test those arrangements to ensure they are proportionate and targeted and to see if there are better ways to protect customers and make sure the market is dynamic and competitive for retailers.
The review launches this week and Ofwat expects to publish initial findings and next steps by April 2018.
Ofwat Senior Director of Customers and Casework, Emma Kelso said:
“The purpose of this review is to help us understand how the current arrangements relating to credit requirements for the business retail market are working and to examine the options available to remedy any issues which arise. In particular, we are keen to understand whether the current arrangements are effectively facilitating new entrants wishing to enter the market.”
Note to Editors
- Following a competitive tender process, Ofwat has appointed KPMG LLP to lead, on Ofwat’s behalf, the first leg of a review of the credit arrangements in the business retail market.
Latest News from
Retail water market hits 100,000 switches09/02/2018 14:15:00
Interest in the business retail water market is on the increase, according to figures released by market operator MOSL today. Over 100,000 eligible business sites have now switched water and wastewater supplier since the market opened ten months ago.
Ofwat statement on Southern Water investigation03/02/2018 07:20:00
Ofwat has opened an investigation to consider whether Southern Water has breached its statutory duties and licence obligations, which fall under our remit to enforce.
Service Delivery Report – Water companies’ performance in 2016/1701/02/2018 14:20:00
Water companies are responding to many of the challenges laid down by Ofwat at the 2014 price review, however there remains room for improvement, the regulator’s Service Delivery Report published today reveals.
Ofwat takes to the airwaves to spark innovation in water sector31/01/2018 10:15:00
Ofwat will seek to channel innovation in the water sector this February, with a new digital campaign aimed at encouraging water companies to fully embrace innovation and the opportunities it brings.