Performance charges suspended for post-retailer exit supply points

Market performance charges will be suspended for three months – extendable at Ofwat’s discretion – when a retailer takes on customers following another retailer’s exit.

Ofwat last week approved a panel recommendation to implement on 1 July CPW097 and CPM025, suspending Market Performance Standard charges for supply points taken on under interim supply arrangements.

The objective is to encourage retailers to opt in more enthusiastically to take on customers when another retailer exits; opt-in rates were low when the Tor Water and Aquaflow exits had to be handled, in part because retailers were concerned their market performance would suffer from taking on Interim Duty Supply Points and that financial penalties would result.

The move came as part of a review of the interim supply processes in the market, being undertaken by Ofwat and MOSL.