Managing Retailer Default Situations
RAG: Final report
19 Dec 2012
The Retail Advisory Group delivered its report to the Authority Board on 19 December 2012 outlining its analysis and recommended approach to managing retailer default situations.
The Retail Advisory Group's main recommendations were:
- the Authority should amend the Code to establish a regulated process for ensuring that the defaulting retailer’s customers are transferred to another retailer in a way that:
- facilitates a commercial solution to a retailer default
- maintains the confidence of consumers in a reliable electricity supply
- maintains the confidence of industry participants that a retailer default will be resolved in a finite time
- the regulated process should involve:
- a period for the failed retailer (or the receiver/liquidator) to seek a commercial solution, eg a trade sale of the customer base or an equity injection. The RAG suggests 7 elapsed days
- a period for customers to switch to a new retailer. If a customer does not switch during this period they will be allocated a new retailer by the Authority. The RAG suggests 5 elapsed days
- a period for voluntary customer switches to be processed. The RAG wanted time for customer switching decisions to be processed. A mandated transfer could cause frustration by overriding customer decisions. The RAG suggests 5 elapsed days
- the event date for the mandated switch is day 17 of the process. Mandated switches should be completed over the next 10 days according to switching rules.
The Authority has decided to adopt the Retail Advisory Group's recommended approach to managing retailer default situations and will consult on detailed Code amendments in due course.