To further develop the overall proposals for the credit arrangements for the new retail market

The purpose of this work is to build on current work on the development and implementation of the final credit arrangements that should be included within the market codes in readiness for the opening of the non-household retail market in April 2017 and to similarly consider the associated impacts for PR19. The market codes will include the appropriate credit terms and arrangements for interactions between wholesalers and retailers and any wholesale impacts will need to be considered as part of PR19.

It is imperative that the new policy proposals are entirely consistent with our statutory duties as set out in the legislation and support an effective retail market with high levels of rivalry that protects customers.

Scope

We are tendering for a piece of work to further develop the overall proposals for the credit arrangements for the new retail market, building on existing work, including incorporating any alternative mechanisms to address the risk of retailer default that may sit in the wholesale price controls and therefore fall outside of the credit arrangements set out in the codes. We wish to see an overall package of proposals developed that are sensible and coherent with other areas of policy, including for example the Interim Supply arrangements.

The key task for the successful contractor will be to draft an Ofwat consultation document on the overall credit proposals for the retail market, for publication as soon as possible. That document should set out:

• a.The importance of credit arrangements for the new market and in particular for customers.
• b.The approach taken at PR14 and the subsequent development of the retail codes and credit arrangements.
• c.The analysis of credit risk and the associated wholesale and retail impacts, including the end-to-end process (building on existing work that has been completed and can be made available to the successful contractor).
• d.The proposed overall approach to credit risk including the arrangements under each of the different credit options and invite views on those proposals. This should include explicit analysis of any potential wholesale socialisation mechanisms that may form part of the proposed package of arrangements.

Skills and Experience

The Customer expects that the Contractor’s Staff nominated for the Services will have the following skills and experience:

Broad regulatory knowledge and experience

An understanding of:

Specific knowledge, skills and experience

Additional information: For further information, please contact: procurement@ofwat.gsi.gov.uk