Business customer price protection set to stay after 2020

Ofwat is minded to keep in place, beyond April 2020, the existing system of price protection for business customers whose incumbent has exited the retail market and who do not switch .

In a consultation on the Retail Exit Code which governs these scenarios, the regulator considered four options for revising the price protections in place for customers when the current arrangements expire at the end of March 2020: removal of price protections; specifying only that prices must be reasonable and non-discriminatory; maintaining a control based on PR16, possibly with some adjustments; or setting up a price control based on a new underlying model.

It seeks views on its plan to stick with the third option. The only exception is large businesses which are eligible for protection but have not been transferred (such as new large customers). For these customers, prices currently must be reasonable and non-discriminatory but are not explicitly linked to PR16. Again, Ofwat is minded to keep this policy in place after 2020.