Ofwat publishes transition process for shift to new market arrangements

Ofwat has published its notification of the transition process taking retailers from the current legal and regulatory framework to the new market arrangements,

"We need to make sure that certain elements of the current framework that will no longer be required, are revoked or otherwise ‘switched off’. Included in those elements are the old WSLs (including Combined Licences), as they will be replaced by the new WSSLs," said the regulator, adding: "A seamless transition is extremely important for both customers and market participants, as it is essential for the effective operation of the expanded market from April 2017."

The transition will cover the revocation of old water supply licences (WSLs) and statutory compensation.

Ofwat will use the transition scheme to revoke all old WSLs (including Combined Licences) immediately prior to market opening (currently expected to be at the end of 23:59:59 hrs on 31 March 2017). Ot said this will "provide a seamless transition to the new WSSLs, which will take effect at the beginning of the date of market opening (currently expected to be 1 April 2017).

No compensation will payable in relation to the revocation of old WSLs. "We are not required to include a process in the scheme for claiming compensation, as compensation will be stated to be nil and such a process would therefore be unnecessary," the regulator explained.