Ofwat to revoke existing water supply licences before market opening

Ofwat will revoke all existing water supply licences immediately prior to market opening, to provide a “seamless transition” to the new water supply and sewerage licences.

Water supply and sewerage licences (WSSLs) are expected to take effect at 00:01am on the date of market opening.

In a response document explaining further Ofwat’s plan to use a statutory transition scheme to help prepare for the opening of the expanded business retail market in April 2017, the regulator emphasised that all retailers who wish to participate must hold a WSSL with a retail authorisation in accordance with the provisions of the Water Act 2014.

Therefore, any holder of a water supply licence (WSL) that wishes to continue participating in the retail market after April 2017 must be granted a WSSL before April 2017.

Additionally, any holder of a combined supply licence that wishes to retain the right to make introductions of water to supply their own customers must apply for and be granted a new water supply licence with a wholesale authorisation or a supplementary authorisation prior to April 2017.

The regulator confirmed that it will use a statutory transition scheme to help deliver the necessary transition arrangements.

It also said that, for a period of 30 working days immediately before market opening, any existing WSL retailers will not be allowed to request to transfer a customer under the existing process.

This is intended to avoid any issues arising from customer switches being part-way through at the time that the existing arrangements are replaced by the new ones.

Ofwat is currently working with Defra and MOSL to develop and implement the wider transition arrangements for the open water market. This includes giving effect to the new legal and regulatory framework; and establishing or appointing the bodies that will play a key role in the market governance framework, such as the market operator and panel.