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Water companies must make sure non-domestic customers are not left without a retailer if their company exits the market, Ofwat has warned.
In a consultation document, the regulator has set out the next steps it is proposing to take to confirm the policy and legal framework for interim supply arrangements.
These arrangements will address the situation where a water or sewerage supply licensee stops supplying its non-household customers when the market opens in 2017.
Ofwat said an interim supplier should not be the “default response” to all licensee failures. However, where necessary, the regulator will be required to take steps to secure continuity of supply for all affected customers, ensuring non-household customers continue to be protected through “robust and effective” interim supply arrangements.
The regulator is also looking specifically at deemed contracts.
Under current arrangements, most water and wastewater customers do not have a negotiated contract with their water company, and there is a statutory duty for the appointed company to provide a service and a power to charge the customer for the provision of such services.
Customers covered by a deemed contract would be those whose water company chooses to exit the retail market before they have had a chance to engage.
In a separate consultation, Ofwat has identified three scenarios where deemed contracts will be used: for customers transferred during the exit process, for customers in an area where the appointed company has already exited, and for interim supply.
The regulator is seeking the views of stakeholders and will refine its proposed approach to the deemed contract arrangements.
Both consultations close 30 November.
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