Ofwat gives green light to changes to smooth interim supply arrangements

Ofwat has approved, with only minor modifications, the changes it consulted on to the Interim Supply Code in July/August, with a view to making the process of allocating business customers when their retailer fails slicker.

The changes concern:

• simplification of how retailers can amend their ‘opted in’ status, to encourage more to get involved at the time of an interim supply event;

• streamlining and clarification of Statement of Interim Supply Capacity arrangements, which retailers provide to inform Ofwat of their capacity to take on affected supply points – particularly to insert reference to Alternative Eligible Credit Support and Alternative Payment Terms;

• the interim supplier allocation methodology;

• aligning the relevant timetable obligations on MOSL and Ofwat;

• broadening the circumstances in which interim supply can be invoked, and clarifying when wholesale contracts will be terminated where Ofwat revokes a retailer’s licence;

• extending the timeframe for providing information to affected customers at Ofwat’s discretion, so that an interim licensee’s estimation of on-boarding time may be taken into account; and

• giving discretion to Ofwat to divide affected supply points in one area, or a relevant combination of areas, up between multiple retailers, to provide flexibility for the regulator to distribute customers by criteria such as customer type rather than simply by area. This will enable participation by retailers that would not previously have been able to bid because they were restricted by the number of supply points they were able to take on.

The changes will be implemented to the Interim Supply Code, and via CPW103 and CPM032 to the Wholesale Retail Code and the Market Arrangements Code, on 9 September.

Ofwat said it would give further consideration to customers’ right to switch away from interim supplier, and to the submission of transfer reads following an interim supply event, before deciding on any further changes to the codes.