Water industry regulator Ofwat has set out the new governance arrangements to be put in place for the Open Water programme from January 2015 onwards.
As part of Ofwat’s consultation to amend companies’ licences, the regulator recently announced a new approach to taking forward the work of the Open Water programme. This would see Open Water Market Limited(OWML) continuing to deliver its current programme of work up to the end of 2014 before the work formally moves into a ring-fenced programme taken forward by Ofwat from January 2015.
The OpenWater programme and OWML are overseen by the High Level Group (HLG). Under the new arrangements, the HLG’s steering role will continue unchanged, both:
- during the period up to the end of the calendar year when OWML is expected to be wound down; and
- in the new year when the programme formally becomes part of Ofwat.
Once the programme joins Ofwat in January 2015, the final governance and decision-making on its work for the English market will be made by Ofwat’s Board.
Ofwat expects the new programme to be:
- ring-fenced within Ofwat’s budget to ensure that any monies raised to support the programme are not used for other activities; and
- reported separately in Ofwat’s accounts.
This is similar to the approach Ofwat takes to the reporting of its work on the Thames Tideway Tunnel.
The regulator also proposes to set up a new Advisory Panel of industry representatives to obtain industry input into, and oversight of, the delivery of the new market arrangements. The panel will be set up in the autumn with the elections run and managed by OWML. It would then continue its role after these activities transfer to Ofwat at the end of the year. The panel would include representatives from wholesalers and retailers (both incumbents and new entrants).
The Advisory Panel will continue in its role until the initial market codes are issued ahead of market opening, when it will evolve into the Code Change Panel. The panel’s role would be to review the proposed market arrangements and make recommendations to Ofwat’s Board on key aspects of the market design and, in particular, the design of the market and operational codes in England. Final decisions on these issues would continue to be taken by Ofwat’s Board - the panel will not be a decision-making body.
More details on the proposed longer-term governance arrangements, including the Code Change Panel, will be provided in Ofwat's market governance consultation document which it will publish within the next month.
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