No ‘grace period’ after market opening, warns Ofwat

Ofwat will immediately and rigorously enforce its Customer Protection Code of Practice when the non-domestic retail market opens

An Ofwat spokesperson has warned players in the new non-domestic water retail market that they should not expect any “settling in time” in terms of establishing compliance with market rules and standards when competition begins in April.

The regulator will immediately and fully enforce its Customer Protection Code of Practice, said John Russell, senior director of strategy and planning at Ofwat.

“It is important to emphasise that there is no grace period with this [code],” said Russell. “We’ve heard some noises that [companies think] there will be a period of settling in and so enforcement action won’t be taken for problems. That is not true.”

Russell expressed confidence that the introduction of competition in non-domestic water retail will bring multiple benefits to businesses and that improvements to customers service will also spill over into the domestic market.

However, he acknowledged that the market does pose some risks, especially to small and micro business customers with “limited financial resilience”.

Russell observed that “in many respects” such small and micro firms “behave like residential customers in terms of their time and ability to engage with the market”.

He reminded his audience at the conference that Ofwat has set out clear standards to protect these customers after market opening and that compliance with its Customer Protection Code of Practice is a licence condition for retailers.

“If [retailers] don’t comply with the code, Ofwat will be able to take action against them, up to and including revoking their licence,” he said.

Russell said that Ofwat will closely monitor company performance against the Code and will report on this every three to five months.