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by Karma Loveday

Codes Panel consults on its purpose, composition and principles

MOSL and the Panel have posed a series of questions about market governance fundamentals, open for comment until 18 June.


The Panel has published a discussion paper on its purpose and opened three consultations: two considering alternative ideas for how the Panel should be composed and one proposing a new set of principles to better reflect desired market outcomes. These are all part of an ongoing Market Governance Review which seeks to promote efficient self governance in customers’ interests.


Among the key questions are:

  • whether there is a need for the Panel to take strategic action to deliver Defra and Ofwat’s policy direction, vision and strategy for the market as well as efficiently designing and developing technical solutions for market rule changes; and

  • whether governance should be market-led rather than industry-led, encompassing stakeholder voices and needs beyond those of trading parties including end customers, regulators, government, the market operator and other groups.


The Panel is consulting on two mutually exclusive proposals on composition: CPM021 put forward by Castle Water; and CPM039 proposed by Ofwat in April 2021.


The final consultation, CPM040/CPW121, was proposed by Ofwat in April 2021 and seeks to review the principles in the Market Arrangements Code (MAC) and the Wholesale-Retail Code (WRC) that underlie Panel decision making. Currently, there are eight principles in the MAC and ten principles in WRC. Instead of these,


Ofwat has proposed introducing a primary principle based on promoting customers interests with a further eight supporting principles.

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