Ofwat continues Thames business retail investigation but under Water Industry Act

Ofwat has transferred part of its Competition Act 1998 investigation into Thames Water’s activities in the business retail market to a new investigation being undertaken under the Water Industry Act 1991. It said the Competition Act was not the most appropriate tool to address issues of data accuracy and management resourcing.

Ofwat is considering whether Thames has breached and/or is in breach of:

• Condition R2 (as was) of its licence, by failing to ensure that the data that it collected and uploaded into CMOS ahead of market opening was sufficiently accurate to enable the effective functioning of the business retail market;

• the requirements of the Market Terms of the Wholesale Retail Code, by failing to maintain accurate data and correct known data errors within CMOS; or

• Condition P (previously Condition F) of its licence, by failing to ensure that it has in place adequate management resources and systems of planning and internal control to enable it to carry out its regulated activities.

Under sections 18-22A of the Act, Ofwat can issue an enforcement order and may impose a financial penalty for a licence breach. Under sections 66DA(4) and 117F(4) of the Act, it may issue a direction to take action to return to compliance with the Wholesale Retail Code.