The regulator has written to a letter to them and made a series of recommendations to help reinforce trust and confidence in the market following a number of complaints from retailers late last year.
It said action against these recommendations will be monitored and failure to act could result in Ofwat taking further action.
Responses received by Ofwat from all wholesalers and most retailers in the business retail market following its March 2018 questionnaire highlighted three main problem areas:
- A lack of competitive intensity in the meter reading services market leading to high charges and low service quality
- Allegations of wholesalers associated with a retailer treating their associated retailer and other retailers on different terms
- A view that inefficient market design on meter reading leading to suboptimal outcomes
While Ofwat’s analysis has not led it to conclusively identify any competition concerns related to the first two issues at this stage, it is concerned at the lack of transparency around these services.
It believes promoting higher levels of transparency would reassure and help retailers and reduce the risk of any anti-competitive behaviour taking place in the future.
Emma Kelso, Senior Director for Customers and Casework said: “Poor interaction between wholesalers has a knock-on impact on customers and the quality of service they receive. Our recommendations call for the wholesalers to take immediate action to improve meter reading services by making these services more transparent to all market participants and customers.
“We expect to see significant improvement and if necessary, we will use regulatory tools if we believe there has been anti-competitive behaviour.”