MOSL has published its response to Ofwat's consultation on proposals to strengthen the interim supply arrangements in the event that a retailer exits the non-household market.
The risk of a large retailer failing and customers being stranded without a retailer is the highest priority risk on MOSL's risk register. We are therefore pleased to be working closely with Ofwat to try and deliver more robust interim supply arrangements to both protect customers and promote competition in the market.
We are mindful that Ofwat's proposals will not entirely remove the risk of interim retailers not stepping forward which will remain voluntary and require retailers to ‘opt-in’. We therefore believe these proposals should form part of a wider programme of changes to ensure the market has a clear and credible process to protect customers in the event of retailer failure.
MOSL generally supports an ex-post levy approach to recovering costs incurred by the interim retailer. However, we set out that we believe recovering costs through the Central Market Operating System (CMOS) settlement arrangements would be a complex process requiring timely and expensive CMOS changes. There would also be significant challenges associated with calculating and recalculating these payments for each settlement run.
To avoid the need for CMOS changes, we propose in our response an interim supply levy outside of settlement for MOSL to recover costs directly from retailers. MOSL would calculate the charge to be applied by retailers to customers. Retailers would pay this to MOSL and in turn collect such charges through an additional item on customer bills.
We look forward to continuing to work with Ofwat to deliver more robust arrangements in the event of retailer failure.
Our full response can be found here. If you have any questions on it, please email
