Ofwat has now modified the licences of five water companies, with their consent, to facilitate Direct Procurement for Customers schemes.
The licence changes concern:
• establishing the DPC regulatory framework, including specifying the process firms must follow in carrying out a DPC procurement (new Condition U);
• allowing the water company to recover from its customers, outside of price controls, the designated charges that it has to pay to the competitively appointed provider (CAP) for services normally including the design, build, financing, maintenance and operation of assets (amendments to Condition B); and
• facilitating, in specified circumstances, a DPC interim determination – such as if the project needed to return to delivery by the company rather than by the CAP (amendment to Condition B).
The new licence conditions came into effect on 12 February for Welsh Water, and 1 February for Affinity Water, Anglian Water, United Utilities and Southern Water. This followed a statutory consultation in November 2020.
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