Delivering recommendations: Five-year review of the water retail open market
In March 2023, CCW published our review of business customers’ experience of five years of the water retail market.
In that report we made 22 recommendations on what needs to change in the market; by whom, and when, to deliver benefits for all business customers.
We set out the progress that’s been made against those deliverables by working with key organisations in the water retail market.
Progress report
Recommendation and action needed
Changes to be made to water company licences to make wholesalers accountable under the Alternative Dispute Resolution (ADR) process for business customer complaints
| Status of delivery: | On-going |
Target completion date
- December 2025
CCW action
In February 2024, we submitted a report to Ofwat, detailing why we believe a licence change to make wholesalers accountable will be fairer for customers and setting out the number of ADR cases with wholesaler involvement.
On-going action and next steps
Ofwat action is required to amend wholesalers’ licences. We are working with Ofwat on making wholesalers accountable.
In September, Ofwat published a Call for Inputs on their proposal to ask wholesalers to sign up to CCW’s ADR scheme. We support this, and we want it to be accompanied by a licence change.
Recommendation and action needed
Develop and implement strong incentives for both retailers and wholesalers to improve their service for businesses through:
- implementing a measure of customer satisfaction in wholesaler services (BR-Mex) performance commitments
- new Market Performance Framework (MPF) launched by 2024
| Status of delivery: | On-going |
Target completion date
- April 2025 (BR-Mex)
- December 2024 (MPF)
CCW action
CCW has helped shape the development of Ofwat’s pilot customer survey. The proposed design of the BR-Mex incentive (pdf) is set out in Ofwat’s Draft Determinations for the 2025-2030 price review period, published in July 2024.
The design of the new MPF continues with CCW regularly influencing its development to the benefit of customers. We support the direction this work is moving in. It is currently focused on the activities that have the greatest customer impact, as well as including a range of incentives to encourage retailers and wholesalers to deliver these to a high standard.
On-going action and next steps
This market project is due to be delivered from April 2025.
Recommendation and action needed
All wholesalers to offer a customer-focused policy on leakage allowance to ensure that businesses get:
- at least one allowance on their water charges
- advice and assistance with leakage repairs, where needed
| Status of delivery: | On-going |
Target completion date
- April 2024
CCW action
CCW asked all wholesalers to publish their leakage allowance policies on their websites to ensure these are accessible to both retailers and customers. The majority have done this and we continue to press for all to deliver our ask. CCW has reviewed the policies and accessibility to identify good practice.
A self-help leak test for customers has been produced by a working group of retailers and wholesalers, led by CCW. This will help customers understand which pipework they are responsible for, and how to safely identify, and repair, leaks.
On-going action and next steps
CCW’s actions have broadened beyond our original plan. We will be writing to wholesalers about their policies to ensure they have a greater customer focus. We will ask for the self-help leak test to be used by wholesalers and retailers. We aim to complete work in this area by November 2024.
Recommendation and action needed
Ofwat to provide greater clarity and consistency on premises eligibility for the market and work with CCW to improve the transition process where a premises leaves or enters the retail market.
| Status of delivery: | On-going |
Target completion date
- April 2024
CCW action
Through our regular retailer and business customer forums, and discussions with customers and trading parties, we have gathered further evidence on areas for improvement to the current eligibility guidance. Market eligibility has formed part of MOSL’s data assurance project, which has continued beyond April 2024. The findings from this project have assisted our understanding on the main challenges in this area, some of which are:
- confusion regarding responsibility for making a decision on eligibility
- some customers’ properties being treated differently in different areas of the country.
We have worked with MOSL to developed proposed guidance changes, which have been shared with the eligibility Retailer Wholesaler Group (RWG) and reviewed at the June 2024 User Forum.
On-going action and next steps
CCW’s actions have broadened beyond our original plan. We aim to complete work in this area by November 2024. We will next be testing our proposals with business customers before finalising to present to Ofwat. We will then recommend that Ofwat amend the eligibility guidance to reflect our proposed changes.
Recommendation and action needed
CCW to submit a change request to the Customer Protection Code of Practice in 2023 to ensure business customers receive at least two bills based on an actual meter reading each year.
| Status of delivery: | On-going |
Target completion date
- April 2024
CCW action
A code change request was submitted to Ofwat on 14 December 2023. A further case for change was set out in our response to Ofwat’s consultation on their wider reforms to the CPCoP, on 20 February 2024.
On-going action and next steps
While CCW’s action is complete, we will continue to work with Ofwat. This includes responding to the Ofwat consultation on propose changes to the CPCoP, published on 15 July 2024.
Recommendation and action needed
Retailers and wholesalers to be incentivised to address meters left unread for 12 months or longer, through the new Market Performance Framework, so no meters remain unread.
| Status of delivery: | On-going |
Target completion date
- April 2024
CCW action
Taking regular meter reads, and swiftly addressing any problems with meters, are activities of focus in the new MPF. CCW has input to the MPF developments, and we support tough incentives on retailers and wholesalers to ensure all meters are regularly read.
On-going action and next steps
This market project is due to be delivered from April 2025. We continue to input to the development of the MPF, including responding to all MOSL consultations.
Recommendation and action needed
Wholesalers to commit to work with retailers to implement water efficiency services in their Water Resources Management Plans and PR24 business plans.
| Status of delivery: | On-going |
Target completion date
- April 2025
CCW action
We have worked with retailers and water companies on the water efficiency RWG focusing on this market issue. Actions of the group include developing a menu of options to improve Wholesaler and Retailer collaboration on water efficiency.
On-going action and next steps
A final view on wholesalers’ commitments on water efficiency services will be known at Final Determinations of their business plans. We are on track to understand commitments by April 2025.
Recommendation and action needed
Retailers to offer tailored water efficiency advice to customers to help them better manage their water use, as part of their competitive services for customers.
| Status of delivery: | On-going |
Target completion date
- April 2024
CCW action
We have worked with retailers and water companies on the water efficiency RWG focusing on this market issue. Actions of the group include developing a menu of options to improve Wholesaler and Retailer collaboration on NHH water efficiency.
Three retailers presented their water efficiency strategies at CCW’s Retailer Forum on 29 June 2023. These focused on raising customer awareness and support for customers, including help with leaks.
On-going action and next steps
We will continue to encourage retailers to develop strategies in this area, both through future Retailer Forums, and in our retailer engagement work.
Recommendation and action needed
Wholesalers to have a clear plan for smart metering for business customers in their Water Resources Management Plans and PR24 business plans, and accelerate those plans where possible. These should include a targeted approach, prioritising the following areas:
- meters left unread for 12 months or longer
- water stressed areas
- high water users
| Status of delivery: | On-going |
Target completion date
- April 2025
CCW action
All wholesalers have published plans for their smart metering programs in their PR24 business plans. We have assessed Ofwat’s Draft Determination on smart metering roll-out for businesses.
We have also input to the development of the National Metering Strategy, published in March 2024. We support the recommendation made in this strategy, which include a call for meters unread for 12 months or longer to be included in wholesalers smart metering programmes, and emphasises the need for clear communication with customers so the benefits of a switch to a smart meter can be promoted and understood.
On-going action and next steps
We will be responding to the Draft Determinations in August 2024. Final Determinations on wholesalers’ business plans are due in December 2024. We expect to have clarity on wholesalers’ plans for smart metering for business customers from 2025 and beyond.
Recommendation and action needed
Wholesalers to ensure that data from smart meters is made available, understandable, presented in a consistent format and usable for retailers and customers.
| Status of delivery: | On-going |
Target completion date
- April 2025
CCW action
As the customer representative on the Metering Committee, CCW has helped to shape work on the sharing of smart metering data.
On-going action and next steps
We will continue to have an input to the sharing of smart metering data. It is important that customers receive the information on the water they are using in a way that best meets their needs, and improves the accuracy of bills.
Recommendation and action needed
Improvements to be made to the code change process, following a review, from April 2023 so that it works better for businesses by:
- prioritising changes that have the greatest benefit for customers
- making the change process more transparent and accessible for wholesalers, retailers, market committees and key market stakeholders
- improving the end-to-end process by tailoring it to respond to each change request in a timely manner
| Status of delivery: | Completed |
Target completion date
- December 2023
CCW action
The new code change process was implemented in December 2023, which has helped to improve the end to end process and has a greater focus on changes that will benefit customers.
CCW played an integral part of the new process development. We will continue to monitor this to ensure it is genuinely prioritising changes that will benefit customers.
Recommendation and action needed
Give CCW the ability to raise a proposed change to the market rules, as part of an improved code change process.
| Status of delivery: | Completed |
Target completion date
- December 2023
CCW action
As part of our involvement in developing the new code change process, we recommended that CCW be given the ability to raise code changes. This was agreed and anyone can now raise a change to the market codes, as part of the new process.
Recommendation and action needed
Wholesalers and retailers must work together with MOSL to complete a one-off data cleanse.
Develop and implement strong incentives for both wholesalers and retailers to ensure all new customer and market data is accurate through the new Market Performance Framework.
| Status of delivery: | On-going |
Target completion date
- April 2024 (Work with MOSL)
- December 2024 (Develop and implement incentives)
CCW action
CCW is a member of the data assurance project group, led by MOSL. We are monitoring how this is being delivered, and the impact on customers. The group is assessing how to obtain the right data details for properties, and the best practice for doing this.
Ensuring customer consumption and property data is accurate is an activity of focus in the proposed MPF, which CCW continues to input to. Incentives to ensure this happens are under development.
On-going action and next steps
Both projects are due to complete during 2025.
Recommendation and action needed
Improve the change process for the Customer Protection Code of Practice to provide set timelines by which Ofwat must have completed its review of change proposals, and have consulted on its decision (if required). No change request should take longer than six months to be considered, consulted on and a decision made.
| Status of delivery: | On-going |
Target completion date
- April 2024
CCW action
We submitted robust responses to Ofwat’s consultations on their proposed changes to the CPCoP on 26 June 2023, and 20 February 2024. We have continued to make the case that code change requests should be carried out within a maximum of six months from end to end.
On-going action and next steps
Ofwat does not currently support a prescribed timeline for assessing proposed changes. CCW believes that a set timeline is in the best interests of customers, and will continue to press for this change. We make this case in our response to the latest Ofwat consultation, published on 15 July 2024.
Recommendation and action needed
Ofwat must set out circumstances and criteria where it will take action against retailers who do not follow the Customer Protection Code of Practice.
| Status of delivery: | On-going |
Target completion date
- April 2024
CCW action
We responded to Ofwat’s consultations on their proposed changes to the CPCoP, and there is a proposal for retailers to provide an annual statement of compliance with the CPCoP.
On-going action and next steps
Ofwat is still in the process of publishing the decisions made in respect of its review of the CPCoP.
Recommendation and action needed
Strengthened market rules to guarantee continuous service and protection of customers’ money when a retailer exits the retail market so that:
- businesses receive their credit back on an annual basis
- there are no gaps in service that impact businesses, including where there may be no backstop retailer to transfer to
| Status of delivery: | On-going |
Target completion date
- April 2024 (credit back on annual basis)
- April 2025 (no gaps in service)
CCW action
At regular points throughout the year, we provided complaints evidence to Ofwat, showing the difficulties some customers experience with obtaining credit refunds from their retailer. In July, we amended our case for an automatic credit refund requirement, so this will only apply to Direct Debit customers.
We support Ofwat’s proposal to introduce a cost recovery mechanism that will allow retailers to claim back excess costs incurred in taking on customers of a failed retailer. This is set out in our consultation response. This proposal should help to encourage more retailers to participate, which will reduce the risk of a gap in service.
On-going action and next steps
Ofwat consulted on our amended annual credit refund proposal from 30 July 2024.
Ofwat is proposing to implement its cost recovery mechanism, and we will be involved in this to ensure that it is delivered in the best interests of customers.
Recommendation and action needed
Changes to be made to legislation and market codes to remove all temporary building supplies from the market with business customer premises only entering the retail market at the point when the permanent water connection is complete.
Wholesalers should be given clear responsibility for ensuring data on temporary building supplies is correct in the market until this change in legislation is enacted.
| Status of delivery: | On-going |
Target completion date
- April 2025 (changes to legislation and market codes)
- April 2024 (correct temporary building supplies responsibility)
On-going action and next steps
We will work with Ofwat and Defra with the aim of securing a commitment to remove temporary building supplies from the competitive water market through a change in legislation.
We will work with MOSL on a proposed change to the market codes to improve the process, so a customer of the new building can then be billed promptly and correctly once the development is completed.
Recommendation and action needed
There should be a change to the eligibility criteria in England unless tangible benefits are realised for micro-businesses, measurable by the rate of switching and contract re-negotiation.
We would expect the number of switches by businesses using up to 0.5Ml of water a year to increase by 10% points on the current levels in the next two years to 2025. Similarly, we want to see an increase in contract re-negotiation by 5% points for these customers by 2025. If these targets are not met within two years we will recommend a change in legislation.
The change we would be seeking is to amend the market eligibility threshold in England so both current and future customers, using up to 0.5Ml of water a year, are no longer eligible unless they have already switched retailer and re-negotiated their contract.
| Status of delivery: | On-going |
Target completion date
- April 2025
CCW action
CCW’s Testing the Waters 2024 will provide updated figures on how many customers are switching retailer, or re-negotiating their contracts, and any wider benefits these customers are experiencing.
The research will be published on 28 November 2024.
On-going action and next steps
We will use the latest research findings, and data from MOSL, in order to take a definitive view by April 2025.