OFWAT has launched an investigation into whether Thames Water is contravening the Wholesale Retail Code.
The Code is the statutory code that sets out the relationship between Wholesalers and Retailers, and how the market operates.
The regulator is looking into whether the £25,000 credit limit that Thames Water has set for non-primary services is consistent with the requirements of the Code.
The investigation, which opened on 26 June, is being undertaken under Ofwat’s powers set out in sections 66DA and 117F of the Water Industry Act 1991.
An Ofwat spokesperson stated: “Under sections 66DA(4) and 117F(4) of the Act, if as a result of our analysis we consider that Thames Water is not complying with the Wholesale Retail Code, we may give it a direction to take specific action to bring itself back into compliance.”
The issue had previously formed part of Ofwat’s Competition Act 1998 investigation into Thames Water.
However, the regulator said it no longer considers that the CA98 is the most appropriate tool to use to carry out the investigation.
A Thames Water spokesperson told ICON: “We continue to assist Ofwat with its enquiries.
“However, due to the ongoing nature of this matter, it would be inappropriate to comment further at this time.”