Ofwat consults on rejecting unmeasured charging Code change for business customers

Ofwat is consulting until 25 November on its decision to reject a change proposed by Castle Water to the Customer Protection Code of Practice (CPCoP) concerning unmeasured charging for business customers.

CP0011 sought to protect retailers from allegations that they are not treating customers fairly by charging them based on unmeasured (unmetered) tariffs. Ofwat said Castle’s concerns appeared to relate primarily to those tariffs based on rateable values (RV).

The regulator argued the change would not add to the protections for customers which the CPCoP is intended to deliver. “Rather, as proposed, the change proposal would simply seek to protect retailers against claims of unfair charging by customers. This is not necessary. By charging a customer based on an unmeasured tariff and simply passing on the wholesale charge levied by the wholesaler, the retailer could not be deemed to be treating a customer unfairly, or of being dishonest, under the existing market rules as the retailer has no control over the wholesale charge.”

Ofwat took the opportunity to clarify the legal framework surrounding the ability of non household customers to access a metered supply and an assessed charge rather than a charge based on RV. It explained that “in submitting the Change Proposal, there appears to be some misunderstandings or misinterpretations about what is, and is not, already possible under the existing legislation and market rules”. Ofwat said: “There is nothing in those charging rules that prevents a Wholesaler from applying an assessed charge for NHH customers rather than a charge based on RV. It does not require a customer to have requested, and been denied, a metered supply.”

Ofwat also took the opportunity to ask the market about the policies and approaches which wholesalers are adopting in relation to unmeasured charges, as well as any alternative steps that could be taken to help to address the concerns raised by Castle.