Ofwat has announced it has revoked the water supply and sewerage licence (WSSL) of Tor Water Limited.
It comes after South West Water told the regulator last month that it has terminated Tor Water’s wholesale contract due to “a series of outstanding undisputed payments”.
Ofwat confirmed the water company had not paid the outstanding invoices and the Contract Termination took effect on 30th January 2020.
The regulator has now stepped in and is working with market operator MOSL to ensure customers have a new retailer as soon as possible but assures them the provision of water and wastewater services to their premises will not be affected.
It said in a statement: “Customers do not need to take any action, there are procedures in place to ensure affected customers are allocated a new retailer.
“It is always difficult to see a company fail but this is the market in action and we would expect to see companies both enter and exit a competitive market. As the market structures evolve, we will continue to make sure that customers are protected and benefit from competition.”
Customers will automatically be allocated a new retailer, following which they can choose to shop around to find a different one or to negotiate a deal with the company they have been allocated.