Wholesalers can draw down security if a retailer fails to lighten the load on businesses

Ofwat has accepted a code change proposal that will enable wholesalers to draw down on credit security that retailers put in place under the provisions of the Wholesale Retail Code to recover outstanding un-invoiced revenue, should a retailer fail.

CPW136 will reduce the impact of costs being passed on to customers. Under the current arrangements, if a Retailer fails, Wholesalers can use a mechanism through the price control arrangements to recover revenue for services consumed by that Retailer, but which are un-invoiced at the time the Retailer exits the market. This process enables Wholesalers to recover a proportion of these costs through making adjustments to customer bills.