Ofwat has revoked Tor Water’s water supply and sewerage licences and warned that other retailers may face the same fate as the “market evolves”.
The regulator will assign existing customers to a new supplier after the Devon-based company announced its exit from the market.
The revocation will come into effect from 19 February and Ofwat is working with MOSL to ensure customers are not affected.
Ofwat’s senior director of markets and enforcement, Emma Kelso reassured Tor Water customers there would be no disruption to their water and wastewater services while they are assigned to a new retailer, which will contact customers shortly.
Kelso said: “Of course, it is always difficult to see a company fail, but this is the market in action. Not all retailers will thrive, and it is possible that, in the future, others will leave the market too.
“As the market structures evolve, we will continue to make sure that customers are protected and continue to benefit from competition.”
The company announced its plan to enter liquidation earlier this month, claiming the the non-domestic market was “toxic” and that it was “not viable” to continue operating under the current market conditions.
Tor was the second company to quit the non-household market since it opened in 2017; the first was Aquaflow which entered liquidation last year.
Tor founder and chief executive Jiro Wilson told Utility Week that despite a refinancing package he decided to liquidate the company because market conditions made it unworkable.
He previously said: “(Last week) the chief executive of MOSL confirmed a number of my suspicions that since deregulation none of the associated retailers had made any money. They have all lost money.”
Ofwat said under the retail market code the Interim Supply Code states customers must be reallocated when a company leaves the market. The regulator will issue a code that provides the details to the new supplier to transition customers from the exiting supplier.