Customer Protection Code of Practice Change Proposal – Ref CP0011 - Decision Document
| Date | 24 March 2022 |
1
Customer Protection Code of Practice Change Proposal –
Ref CP0011
Modification
proposal
Customer Protection Code Change Proposal – CP0011 – Proposal to
amend the CPCoP to protect Retailers from allegations that they are
not treating customers fairly by charging them based on
unmeasured (unmetered) tariffs
Decision
The Authority has decided to reject this Change Proposal
Publication date
24 March 2022
Implementation
date
n/a
We are rejecting this Change Proposal
On 28 October 2021, we consulted on our proposed decision to reject a change to the
Customer Protection Code of Practice (CPCoP) which was raised by Castle Water (“the
Proposer”). It had proposed an amendment to the CPCoP to protect Retailers from
allegations that they are not treating customers fairly by charging them based on
unmeasured (unmetered) tariffs (“the Change Proposal”).
We received 15 responses to the consultation which closed on 25 November 2021 (six
from Retailers, eight from Wholesalers and one from CCW). The vast majority of those
respondents supported our decision to reject the Change Proposal and agreed with our
reasons for doing so, namely that:
• by charging a customer based on an unmeasured tariff and simply passing on the
wholesale charge levied by the Wholesaler, the Retailer could not be deemed to be
treating a customer unfairly, or of being dishonest, under the existing market rules.
• the proposed change to the CPCoP was not necessary and would not add to the
protections for customers which the CPCoP is intended to deliver.
The majority of respondents also welcomed the clarifications that Ofwat had provided
on the ability of non-household (NHH) customers to a) access a metered supply and b)
access an assessed charge rather than a charge based on Rateable Value (RV). Several
respondents considered that this clarification would help to address the concerns
Customer Protection Code Change Proposal – Ref CP0011
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raised by the Proposer (concerns that were also shared by a number of other Retailers).
Many respondents also welcomed, and supported, the work being undertaken by the
Retailer Wholesaler Group (RWG) Wholesale Tariff Structure Simplification Sub-Group.
This is seen as an important step which is being taken by the sector to drive greater
standardisation and consistency of approach in relation to unmeasured charges.
Having considered the responses to our consultation, we have decided to reject the
Change Proposal. We note the concerns about the use of unmeasured tariffs set out in
those responses and the range of views on whether, and how, these might be
addressed. We also note the view of the vast majority of respondents about the
importance of more NHH customers being on metered supplies. Like those
respondents, we too consider that ideally all NHH customers would be charged in this
way and we expect Retailers and Wholesalers to encourage – and enable – customers
to have a meter installed.
While some respondents urged Ofwat to take more direct action, including the
prohibition of RV based charges under our Wholesale Charging Rules, we do not think
this is necessary or appropriate, given the flexibility that the legal framework already
allows and also given the work that the sector is already undertaking via the RWG
Wholesale Tariff Structure Simplification Sub-Group. We will, however, continue to
monitor the situation.
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