Ofwat tables cost recovery mechanism for when retailers fail

Ofwat is looking to implement a cost recovery mechanism to protect customers and suppliers when a retailer unexpectedly exits the market. The regulator said that the current arrangements “are not sufficiently robust” and that there are “significant costs, risks and process that a retailer may face in the event of taking on the customers of a failed retailer”. In particular, Ofwat said that “there are risks that too few retailers would elect to become an interim retailer in the event that one or more other retailers exit the market in an unplanned manner”.

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