Editor’s letter: MOSL’s new leader

The market operator for the new competitive water retail market has been named. Ellen Bennett eyes up his challenges, from securing MOSL’s future funding to withstanding Whitehall scrutiny.

A warm welcome to Chris Scoggins, incoming chief executive of MOSL, taking over from Ben Jeffs.

Formerly head of National Rail Enquiries, he must be used to sharing news of operating problems. Let’s hope he doesn’t have to in his new role.

Here are five top challenges he faces:

• It’s little surprise that the biggest complaints coming from the water market to date have been around data quality. Companies warned that the rush to the April 1 deadline would compromise data quality, and they were right. Utility Week’s new sister publication, Water.Retail, revealed last week that as many as one in ten customers could be missing from the central database. Some retailers are calling on other wholesalers to follow Anglian Water’s example and pay them to identify missing sites.
• There are tough conversations about how much switching shows a healthy market, and how much has happened in water retail to date. Despite its stated commitment to transparency, MOSL has so far been reluctant to share information. Let’s hope Scoggins brings to bear his experience of answering difficult questions.
• Awkward conversations are happening around MOSL’s budget, too, with some retailers muttering about the financial burden it places on them. Until the market opened, MOSL’s activities were funded by the 16 largest incumbent wholesalers, whose contributions were proportionate to their customer numbers. Now it’s funded 50/50 by wholesalers and retailers, and with the proposed price tag for 2017/18 at £13.7 million, it’s not small change.
• The budget will fall heavily on new entrants and small retailers – although payments are calculated in proportion to size. Ensuring these smaller players enjoy a level playing field is one of the top jobs for the new CEO and will require sound negotiating skills.
• Diplomacy will also be called for in dealings with Ofwat and others. Whitehall will be watching closely, with a view to whether domestic competition should follow non-domestic. Like the market itself, Scoggins should expect scrutiny at the highest level.

Talking of scrutiny, an article in the Financial Times attacking Thames Water’s financial affairs, linking them to its recent record fine for sewage and the vexed issue of the Thames Tideway Tunnel, opened the skirmishes for PR19. Former regulator Ian Byatt added fuel to the fire by calling for Thames to be broken up.

Thames has written to the FT challenging some of its numbers, and Ofwat chair Jonson Cox was quick to point out in print that the company, which in part prompted his action on board governance, now complies with the regulator’s new rules.

Whatever the facts, the message to the water companies is clear: you may not be facing the same scrutiny as energy retailers, but don’t make the mistake of thinking no one’s watching.