This document invites views on Ofwat’s proposed guidance on our approach to consents for derogations from the regulatory ring-fencing framework and our assessment of requests from Appointees for the grant of such consents.
The protections in the framework are necessary to ensure that companies can maintain sufficient financial and management resources to carry out their functions in a sustainable manner and to protect regulated companies from the activities of other companies in their corporate group. There may be circumstances where exceptions from these particular protections are appropriate and therefore there are a number of licence provisions that allow companies to ask Ofwat to grant consent to a departure from the ring-fencing framework. We want to ensure that we are fully equipped to consider any requests for consents thoroughly. In considering any alternative arrangements, we want to ensure, consistent with our statutory duties, that the interests of customers are protected, and that companies remain able to carry out their functions and to be financially resilient. Overall, therefore, such arrangements must be in customers’ interests, both short and long term.
This document sets out the background to our approach to consents and then provides draft guidance that we intend to issue on our assessment framework and the process to be followed when companies approach us to request a consent.
Responding to this consultation
We welcome responses to this consultation by close of business on 3 September 2019. We are keen to hear your views on the draft guidance and whether you think there are any other considerations we should take into account when carrying out an assessment of a request for consent.
Please send your responses to FinanceAndGovernance@ofwat.gsi.gov.uk. You can also submit your response by post to:
Centre City Tower
7 Hill Street
Birmingham B5 4UA