Collaboration will be key focus for water retail market

Collaboration with the wider industry will be a key focus of the market operator (MOSL) for the second year of the competitive water market.

In MOSL’s inaugural annual CEO market review published today (31 May), it reflects on the first 12 months of the business water retail market but also explores how it can address issues and drive improvements.

Chris Scoggins, chief executive of MOSL, said the report marks a year of “successes and lessons learned”.

He said: “We have deepened our understanding of market issues and seen some encouraging results from early efforts to drive forward improvement in key areas.

“However, there is still much to do to make the market the best it can be.”

MOSL’s key areas for improvements include billing and switching. The market operator plans to use inputs from its analysis of the central dataset, performance and market information and findings of the market audit, which will be finalised in the summer.

It will also continue to engage with trading parties and other stakeholders to determine how well the market is working.

Scoggins added: “Driving forward improvement will require us to have a clear understanding of the scale, nature and impact of key market issues.”

In early June, MOSL will share its market improvement strategy with members and will outline its “prioritised and staged approach” to drive market improvements and address issues “at their root cause”.

The market operator said this would be supplemented by its market performance operating plan, which will provide the “detailed plans and delivery mechanisms” for this improvement work.

“We will also continue to explore opportunities presented by new technologies, especially where these have the potential to reduce market friction, support a well-functioning market or improve the end-customer experience,” Scoggins said.

MOSL suggests the issue of data quality “has been a consistent theme” in the early phase of the market.

“It is widely recognised that the need for good quality information is essential to enable customers to fully participate in the market and for retailers and wholesalers to interact efficiently.

“Poor quality or missing data can have a wide range of impacts on the functioning of the market,” MOSL said, citing one such area as the “financial settlement between retailers and wholesalers”.

MOSL plans to look at areas of the market which are “hindering the efficient operation of the market and effective competition”. It said it will use tools such as the publication of peer performance and more targeted, issue-specific communications to provide insight and guidance to retailers.

MOSL list the following as notable highlights from the first year:

• Stable operation of the market and its central systems, enabling more than 85,000 daily transactions and over 123,000 switches in the first year.
• Improvements to the functionality of the central market operating system and the establishment of a new digital strategy committee to assess and prioritise digital projects aimed at reducing market friction and supporting a well-functioning market.
• Consideration by the industry code panel of 35 changes to the market codes across a diverse range of areas and the establishment of five panel committees to support the panel in specific areas of market change.
• A comprehensive review led by the panel’s market performance committee, supported by MOSL, of the market performance standards to help drive performance improvement by retailers and wholesalers in key customer-impacting areas.