Ofwat has issued a direction to Tor Water ordering it to pay any “outstanding and undisputed invoices” or statements to wholesalers after it received a number of notifications that the water retailer had not done so.
In addition Tor Water must not provide any services to any new customers while it remains a defaulting trading party. It also must notify the market operator, MOSL, that it is subject to the prohibitions.
Tor has until 28 June to pay the outstanding debt, thought to be in the region of £60,000, a figure which includes “at least” a month in advance charges.
Ofwat says it has received 17 notifications from a contracting wholesaler since August 2018 that Tor Water had not paid invoices.
The regulator also said it had received 11 notifications since October 2018 that Tor had been a “defaulting trading party”, meaning it had failed to pay an amount more than £5,000.
As such Ofwat does not consider that Tor is “acting in compliance” with the wholesale retail code and in the interest of consumer protection feels it is appropriate to take steps to prevent Tor from providing its services to new customers.
In response to the direction, a spokesperson for Tor Water said: “Tor has been issued a directive to bring all of its defaulting settlement bills up to date by the 28 June.
“Our pain is with South West Water which is not prepared to offer any further support to our small but growing business.
“We are confident we will hit this target and it will be business as usual with no impact to any customer services along the way.
“Incidentally, of all the small retailers in England Tor is delivering the highest levels of market performance.
“We have no customer dissatisfaction, no churn and no operational complaints so we are doing something very well.”
Meanwhile a MOSL spokesperson said: “MOSL is aware that South West Water has provided Tor Water with its notice of termination, detailing the intended termination date as 28 June 2019.
“MOSL is informing all wholesalers who currently hold a wholesale contract with Tor Water and we are working closely with Ofwat to monitor the situation and make sure it has minimal impact to market participants and the customers they serve.”
A spokesperson for South West Water said: “As an active supporter of the non-household retail market, we have supported and continue to support all of our retailers. We also work closely with Ofwat and MOSL to ensure that the market operates effectively and fairly.”
South West Water currently serves 21 retailers.
Tor Water was granted a supply licence in June 2018, just over a year after the water retail market opened up in England.
In April Ofwat had to trigger its interim supply process for the first time as Aquaflow Utilities entered liquidation.
Around 74 business customers were transferred to Clear Business Water, which was chosen by the regulator through what effectively is the equivalent to energy’s supplier of last resort process.