Water industry regulator Ofwat is establishing an interim panel to support the opening of the new non household retail market for water and wastewater services in April 2017 – and inviting applications for panel membership.

Under the new arrangements Ofwat has been tasked with establishing an interim code panel made up of elected representatives who will consider and make recommendations to Ofwat on any changes that are needed to the market code documents that set out how the markets will work.

The market codes include:

• the wholesale-retail code (WRC), a statutory code which sets out the business, market and operational terms that will apply to all two-way arrangements between a wholesaler and a established the Open Water programme to deliver this work.
• the market arrangements code (MAC), a non-statutory code which sets out the arrangements to establish a market operator and advisory codes panel, including the process for establishing, joining and operating the market operator.

Anyone will be able to propose changes to the market codes, including market participants, the recently established Market Operator Services Ltd, Ofwat and the Water Industry Commissioner for Scotland. The interim panel will then evaluate and vote each change proposal, followed by a recommendation to Ofwat on whether and when to approve each potential change.

A total of nine members will be appointed to the interim panel, consisting of:

• two members elected by wholesale companies;
• two members elected by associate retailers (retailers associated with wholesale companies);
• two members elected by new entrant retailers;
• one independent Chair; and
• two independent members.

In addition to the interim panel members, the panel will also bring in several invited observers including Ofwat, the Water Industry Commission for Scotland (WICS), MOSL and a consumer representative.

Ofwat to appoint independent Chair

Ofwat said that it should appoint the independent Chair of the panel directly, consistent with the approach taken in other regulated sectors. The regulator is looking to appoint an individual who has the confidence of all stakeholders in the market and has not been employed or engaged by any Water Supply Licence holder during the past five years.

Ofwat will also separately prepare a list of potential independent members of the panel who would be experts with relevant experience of panels in other regulated utilities for the Chair to then select two appropriate candidates.

The interim panel will agree its working practices before it begins its work and its meetings will be public. Ofwat will procure any external resources that are required - to be funded by the Open Water licence fee that Ofwat charges licensed companies.

The regulator is now inviting wholesale companies, associate retailers and new entrant retailers to identify potential candidates to be the representatives for their respective group on the interim panel by 22 May 2015. 

Ofwat is hoping to appoint a Chair for the interim panel by early June 2015 and to appoint the two independent members by the end of June, with the aim of having all members of the interim panel in place by the beginning of July 2015. 

The interim panel will eventually be replaced by an enduring panel following market opening. Ofwat said that ahead of the enduring panel being established, the interim panel would improve acceptance and buy-in to the final market documents by market participants and give the water sector in England and Wales some experience of how a panel should operate.