Meter reading penalties to stay in reformed retail Market Performance Framework

Ofwat has rejected a Code change proposal put forward by Castle Water for Market Performance Standard (MPS) charges to be suspended until a new Market Performance Framework (MPF) is implemented following the MPF reform programme.

Castle proposed in CPM048/CPW131that charges for MPS 17-19 be suspended, with an implementation date fo 29 November. These standards relate to retailers taking meter reads within specific timescales.

Ofwat ruled: “We consider that there is significant potential for customer detriment to arise as a result of suspending these market performance standards charges in their entirety. There is a risk that suspension of all charges for MPS 17, 18 and 19 would lead to reduced incentives on and effort by retailers to obtain actual meter reads, leading to poor customer outcomes and potential missed opportunities to identify and address leakage. The proposed solution also potentially erodes the incentive for retailers to engage with Wholesalers to improve asset and data quality issues.”

It added that MPF reform had the potential to significantly improve incentives though and said: “The information gathered as part of developing this Change Proposal can be a useful input into the design of the enduring MPF."