Retail Exit Code change consultation

Ofwat is consulting until the 11 December on changes to the Retail Exit Code (REC). Two of the key proposals are:

  • Facilitating bulk customer transfers – Ofwat is consulting on removing a regulatory obstacle to enable bulk transfers of customers between Water Supply and / or Sewerage Supply licensees (WSSLs, or licensees) – for example, in the case of a merger between two licensees or where one licensee wishes to sell its customer book to another licensee. In particular, it proposed amending provisions in the REC that require, in all instances, individual customer consent before a licensee can terminate its supply. The amendment proposes to allow a licensee to include in its scheme of terms and conditions a provision allowing it to terminate its supply in a limited set of circumstances.

  • Charges – The consultation proposes allowing retailers to adjust their charges in line with changes to wholesale charges. Ofwat said: “At the moment, a ‘no worse off’ restriction applies to acquiring licensees’ current price term provisions under the REC, but this only applies to 2017-18. For 2018-19 and 2019-20, the REC requires the maximum charges payable by transferred customers (as defined in the REC) to be adjusted on 1 April each year by the “permitted adjustment” (also as defined in the REC).”