In the event of a retailer unexpectedly exiting the market; the Interim Supply Allocation process may be initiated to ensure that customers continue to receive their services, but through a provisional retailer.
Ofwat will instruct MOSL to carry out an Interim Supply Allocation exercise, who will then allocate the Interim Duty Supply Points to retailers on the final list of Opted In Retailers for the relevant Interim Supply Allocation.
During the allocation window for opting in or out of an interim supply event, retailers should review their opt in status in CMOS to ensure it accurately indicates the retailer’s decision to be opted in or opted out.
Once the deadline for temporary suspension has passed, no further action is required by retailers until the interim duty supply points are allocated to them, at which point they will need to take all necessary steps to make the supply point(s) tradeable.
If the supply point is metered, retailers will need to make arrangements for the submission of a transfer read to MOSL. This is in accordance with CSD 0102: ‘Registration: Transfers’ and CSD 0202: ‘Meter Read Submission; Process’ in relation to all meters registered at each affected supply point.
Other than notifying MOSL if a retailer becomes subject to an insolvency event, the wholesaler has very limited involvement in the Interim Supply Allocation exercise. Once the interim supply points have been allocated to retailers, the relevant wholesaler(s) may need to complete actions in accordance with CSD 0102: ‘Registration: Transfers’ and CSD 0202: ‘Meter Read Submission: Process’, in order to make the supply point(s) tradable.
MOSL has produced a guidance document, which outlines the steps required to view and update your opt in status in CMOS.
If the retailer still has an active Water and Sewerage Supply Licence (WSSL), there is no obligation to terminate the wholesale contract. It is down to the individual wholesaler(s) to make this decision. If the revocation of supply has taken place for a retailer i.e. Ofwat has revoked the retailer’s licence, any wholesalers with an active wholesale contract should follow the relevant steps laid out in Section 11.2 of the Business Terms. Please note, the wholesaler must provide MOSL and Ofwat with notice of its intention to terminate the wholesale contract at least ten (10) business days’ in advance i.e. prior to the date of termination specified in the notice.
The date of transfer will be confirmed by Ofwat and MOSL. This timescale will be agreed to ensure a quick and smooth transfer to minimise any customer impact and to provide trading parties enough time to update their opt in status.
The incoming retailer will be responsible for any costs from the date of cessation of supply or the date of termination for the exiting retailer. The exiting retailer will be responsible for any costs prior to the transfer. The history associated with the supply points will not transfer to the new retailer through the interim supply process.
Yes, the exiting retailer will continue to show on all settlement invoices prior to the point of the supply points being transferred to the incoming retailer.
No, there is currently no market template available for a wholesaler termination notice. Wholesalers are required to create a termination notice based on the requirements in the Business Terms.
The exiting retailer will remain responsible for settling any outstanding balance, unless the interim supply process was initiated through an insolvency event. In this case, trading parties should contact the liquidator regarding any outstanding balance.
There are two different methods of allocation which may be used for an interim supply event:
- Ofwat will instruct MOSL to use the allocation process within CMOS, which will allocate the supply points between retailers with an active opt in agreements. In this process, the supply points may be allocated to a number of retailers.
- Ofwat may choose to utilise the tender process, through which retailers are required to provide Ofwat with commercial information. Ofwat will then make an assessment on the retailer deemed the most appropriate for the supply points to be allocated to. In this process, the supply points will only be allocated to one retailer.
If a wholesaler chooses to terminate its contract with a retailer, an interim supply process will be used to allocate the customers to a new licensee (new retailer), but only for the wholesale area for which the contract was terminated. If the retailer has customers in other wholesale areas, the retailer can continue to operate as normal in those areas.
If a retailer exits the market through insolvency or through licence revocation by Ofwat, an interim supply process is used to allocate the customers in all wholesale areas to a new licensee (new retailer).