Opening the expanded business retail market required new systems, licences, rules and processes to enable eligible business and other non-household customers to engage with the market, and for new retailers to enter the market.
These licences, rules and processes are contained in the various codes which have been developed as part of the new legal and regulatory framework.
- Integrated plan for opening of the retail water market, 31 May 2016
- Critical path for retail market opening, 31 May 2016
- Retail market transition arrangements, 12 August 2016
- Strands of assurance, 29 July 2016
- WSSL, Market Entry Assurance and Retail Exit – interdependencies and critical dates, 19 July 2016
- Customer awareness, 15 July 2016
- Assurance group, 31 May 2016
- Second independent review, 8 April 2016
- Governance of the Open Water programme, 29 February 2016
- Letters of assurance – updated advice note, 15 January 2016
- Residential review of competition, 5 December 2015
- Charging Guidance to Ofwat, 11 November 2015
- Open Water budget, 5 November 2016
- Letters of assurance, 15 October 2015
- Response of the Retail Market Opening Management Group to the second independent review of retail market opening (‘Open Water’), 28 July 2016
- Second independent review of retail market opening (‘Open Water’), 28 July 2016
- Ofwat’s response to the recommendations of the baseline review, 30 June 2015
- An independent review of the Open Water programme arrangements (the ‘baseline review’), 5 May 2015
- Open Water budget update note, November 2015
- IB 09/15 Water choice for business customers on track, 30 June 2015
- Revised budget for implementing the new water and wastewater retail services market in England – the Open Water programme, 30 June 2015
- IN 15/08: Opening a new retail market for non-household customers –roles, responsibilities and governance for the Open Water programme after May 2015, 21 May 2015
- Roles, responsibilities and governance of the Open Water programme and transition post May 2015, 21 May 2015
- Open Water programme – roles of different organisations for individual pieces of work, 21 May 2015
- Letter from Ofwat Chief Executive Cathryn Ross to water companies to update them on the opening of the non-household retail market, 17 February 2015
- IN 14/13 Proposed governance arrangements of Open Water, 6 August 2014
- PN 05/14: Ofwat welcomes confirmation of choice for customers in England, 15 May 2014
- IN 14/03: Update on Open Water funding, resources and governance, 14 January 2014
- IN 14/02: Update on preparation for a new retail market for non-household customers, 14 January 2014
- A level playing field for the water market – a discussion document, September 2013
- Water market governance arrangements – a discussion document, September 2013
Legal and Regulatory Framework
The business retail market relies on a number of legal documents to work (the ‘legal framework’) – ranging from legislation to non-statutory guidance.
The diagram below sets out the different elements of the legal framework for the business retail market – and who is responsible for creating these.
The legal framework will evolve as more provisions of the Water Act 2014 come into force, or the new market is set up. For example, various powers exist for the Secretary of State to issue further regulations, such as regulations for the licensing arrangements between England and Wales and Scotland.
- Legal framework for retail market opening – updated February 2017, 3 February 2017
- Modification of conditions of appointment (licences) for 16 appointed companies to require them to provide funding for Open Water, 2 September 2014
- IB 15/14: Ofwat publishes consultation to modify licences, 14 July 2014
Closed Market Consultations, Impact Assessments and Engagement
Information on the various consultations, impact assessments and engagement which we have done and which has led to the creation of the new water retail market.
- Supplementary guidance on whether non-household customers in England and Wales are eligible to switch their retailer: consultation responses and decisions, 19 July 2016
- Eligibility guidance on whether non-household customers in England and Wales are eligible to switch their retailer: consultation responses and decisions, 19 July 2016
- Updated eligibility guidance consultation, 4 April 2016
- Consultation on supplementary guidance: assessing whether non-household customers in England and Wales are eligible to switch their water and wastewater retailer, 10 March 2016
- Protecting customers in the non-household retail market – a consultation on final proposals and a draft customer protection code of practice, 17 March 2016
- Protecting customers in the non-household retail market – a consultation, 3 December 2015
- Customer protection for the retail market: proposal to the Secretary of State and Welsh Ministers for regulations in connection with standards of performance for the supply of water and the provision of sewerage services, 1 April 2016
- Proposed amendments to the Guaranteed Standards Scheme – final impact assessment, 1 April 2016
- Customer protection in a retail market: Guaranteed Standards Scheme – progress update, 3 March 2016
- Customer protection in a retail market: Guaranteed Standards Scheme – a consultation, 2 October 2015
- Direction to supply – consultation, 3 August 2016
- Consultation on retail exit code: conclusions, 6 April 2016
- Deemed Contracts: policy conclusions and consultation on draft Retail Exit Code, 8 February 2016
- Customer protection for the non-household retail market: deemed contracts – a consultation, 30 October 2015
- Consultation on interim supply code: conclusions, 6 April 2016
- Interim supply arrangements: policy conclusions and consultation on draft Interim Supply Code, 5 February 2016
- Interim supply arrangements in relation to the opening of the non-household retail market – a consultation, 30 October 2015
- Retail market transition arrangements – a consultation, 12 August 2016
- Consultation on licensing: results and decisions, 9 December 2015
- Licensing and policy issues in relation to the opening of the non-household retail market – a consultation, 23 June 2015
- Consultation on self-supply licences, 8 April 2016
- Application process for water and sewerage licences – retail market opening for non-household customers: a consultation, 29 January 2016
- Proposals to modify Instruments of Appointment under section 55: a consultation, 15 July 2016
- Retail market opening – further changes to all instruments of appointment: a consultation, 3 May 2016
- Response document – consultation on Ofwat’s statutory notices to modify company appointments and licences to include the market readiness condition, 27 May 2016
- Response document – consultation on Ofwat’s statutory notices to modify company appointments and licences to remove the in-area trading ban, 20 May 2016
- Retail market opening – further changes to all instruments of appointment: a consultation, 3 May 2016
- Consultation on Ofwat’s section 55 proposal to modify Instruments of Appointment and Water Supply Licences – Market Readiness, 3 March 2016
- Consultation on Ofwat’s section 13 and section 17J proposal to modify company licences Removal of the in area trading ban, 3 March 2016
- Priority changes to Instruments of Appointment and Water Supply Licences for non-household retail market opening – consultation, 8 January 2016
- Consultation on the review of non-household retail price controls , 5 November 2015
- Final determinations of price controls 2015-20, 12 December 2014
- Consultation on wholesale charging rules, 12 August 2016
- Consultation on charges scheme rules for 2016-17 and future developments, 1 September 2015
- Consultation on wholesale and retail charges for 2015-16 and charges scheme rules, 16 May 2014
- Wholesale and retail charges – a consultation, 17 January 2014
- Payment terms between wholesalers and retailers – a consultation, 11 October 2013
- New connections charging – consultation, 27 July 2016
- Consultation on credit terms between wholesalers and retailers in the new retail market, 9 June 2016
- Consultation: Application of the new non-household retail market framework to new appointees, small companies and companies based wholly or mainly in Wales, 14 March 2016
Policy and Guidance
We have developed a suite of policy and guidance to enable the effective working of the new retail market. Our policy and guidance follows the consultation process which we have done prior to market opening.
- Eligibility guidance on whether non-household customers in England and Wales are eligible to switch their retailer, 19 July 2016
- Supplementary guidance on whether non-household customers in England and Wales are eligible to switch their retailer, 19 July 2016
- Are non-household customers in England and Wales are eligible to switch their retailer? Decision tree flowcharts, 19 July 2016
- IN 15/12: Opening a new retail market for non-household customers ‒ protecting customers, 4 September 2015
- Direction to Supply: guidance, 1 November
- Retail exit application process, 30 August 2016
- Self-supply licences: conclusions, 29 June 2016
- Credit terms between wholesalers and retailers in the new retail market, 12 September 2016
- Note of Ofwat credit terms workshop 19 February 2016, facilitated by KPMG , 29 February 2016
PR16 and charging
Our PR14 price review final determinations set business retail price controls for a two-year period, allowing for a review of these arrangements prior to market opening. These controls set the total allowed revenue that a retailer can earn for a given customer type, based on an allowed average cost per customer and a net margin as well as forecasts of wholesale revenue and customer numbers in each year. Companies set charges that comply with the annual allowed revenue controls for each customer type which are called default tariffs.
In May 2016, following consultation with stakeholders, we issued our statement of method that set out our approach to this price review (PR16), including how we would assess company proposals for the business retail price controls for the period between 1 April 2017 and 31 March 2019.
In September 2016, following consideration of company proposals, we published our PR16 draft determinations. Stakeholders were asked to respond to these by 28 October 2016.
We have now published our Business retail price review 2016: Final Determinations and accompanying documents below.
- Wholesale charging rules information notice, 24 November 2016
- Wholesale charging rules, 24 November 2016
- Wholesale charging rules and summary, 24 November 2016
- Rheolau codi tâl cyfanwerthu, 24 November 2016
- Rheolau codi tâl cyfanwerthu newydd: dogfen penderfyniad, 24 November 2016
- IN 16/02 Information requirement on publication of indicative wholesale access charges for 2017-18 (revised 18 March 2016), 17 March 2016
- Water companies’ charges schemes 2016-17, 7 March 2016
- IN 15/15 Charges schemes from 2016-17 – moving from an approval process to a rules-based approach to regulating charges schemes, 17 November 2015
- Final charges scheme rules and summary of responses to our draft charges scheme rules, 17 November 2015
- Charges scheme rules issued by the Water Services Regulation Authority under sections 143(6A) and 143B of the Water Industry Act 1991, 17 November 2015
- IN 15/14: Notice of withdrawal of information notice IN 13/21 ‘Payment terms between wholesalers and retailers’, 13 November 2015
- Special agreement register 2015-16, 9 November 2015
- Water company charges schemes 2015-16, 5 February 2015
- PN 01/15 Water companies announce bills for 2015-2016, 3 February 2015
- New connections charging – consultation, 27 July 2016
- Enabling effective competition in the provision of new connections, 26 April 2016
- New connections charging – emerging thinking for discussion, 24 March 2016
- Charging for new connections – a discussion paper, 8 November 2013
- Wholesale and retail charges – a consultation, 17 January 2014
- IN13/21: Payment terms between wholesalers and retailers, 12 November 2013 (withdrawn 13 November 2015)
- Future access pricing in the water sector – a discussion paper, 8 November 2013
- IN 14/17: Approval of charges 2015-16 – our approach, process and information requirements for large and small companies, 17 November 2014