New connections for businesses won’t be passed to retailers

Responsibility for providing new connections services to business customers will stay with wholesalers indefinitely, rather than be passed to retailers as was originally intended under water market arrangements, following an Ofwat decision.

The regulator has approved code change proposal CPW058, which was to remove processes A1-A5 from the Operational Terms of the Wholesale Retail Code, which deal with new connections.

This section of the terms was suspended for 18 months from market opening to October 2018 as core readiness preparations were prioritised. It was agreed that the suspension period would be extended to 1 April 2020 after a further change proposal was raised in January 2018, to allow time for the impact of regulatory changes and other measures to be assessed. These changes included charging rules for new connections, licence changes for New Appointments and Variations, the Code for Adoption Agreements, the PR19 methodology and development of the Developer Service Measure of Experience (D-Mex).

Ofwat has now approved for implementation in July 2019 the proposal put forward in CPW058, to remove the currently suspended A1-A5 provisions. These detail the interactions between retailers and wholesalers when a retailer requests new connections services on behalf of a non-household customer. Ofwat noted: “An active market for making new connections currently exists. Retailers can already engage in the market through wholesalers’ existing new connections processes. It is considered by the vast majority of trading parties to be disproportionately costly to try to make the processes fit for purpose, and that the benefits of introducing them would not outweigh the costs.”

The removal was supported by 21 of the 23 respondents to a February 2019 request for information.