Energy-style competition appeals and a growth duty for Ofwat feature in utility regulation overhaul

The government is to press ahead with giving Ofwat, Ofgem and Ofcom a new Growth Duty and is consulting until 17 January on other significant changes to “strengthen” regulation in the water, energy and telecoms sectors.

In a policy paper from the Department for Business and Trade (DBT) published alongside the Autumn Statement, five priorities with accompanying actions were set out:

• increasing investment and growth – through measures including

conducting a holistic assessment of infrastructure investment needs in energy networks and water, encouraging investment outside of price reviews, and

promoting systems thinking in water resources;

• measures to promote competition including

advocating greater use of comparative metrics,

reviewing concurrency arrangements,

considering a new body in the non-household market to consider code changes and

supporting Ofwat’s July 22 proposals on new appointments and alternative infrastructure delivery routes;

• supporting consumers with proposals including

a multi-sector single Priority Services Register, and

granting powers to Ofwat to allocate business customers to another retailer on a mandatory basis in the event of a non-household supplier exit;

• regulators’ duties rationalised with a view to a greater focus on economic functions; and

• appeals with water price review appeals changed to be more consistent with the energy regime where full redeterminations are not required.

As announced in its Autumn Statement last week, the government said it will take forward the plan to extend the Growth Duty to Ofcom, Ofgem and Ofwat, with effect from April 2024, subject to Parliamentary approval of the necessary secondary legislation. It has issued a consultation on Growth Duty Statutory Guidance.