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MOSL’s work to deliver its bilateral transactions programme, which seeks to ease frictions in the water retail market, has delivered £2.6 million greater savings than forecast.
In its annual report for the year to 31 March 2024, the market operator revealed that the first phase of the project to simplify and standardise how trading parties interact with one another was delivered six months ahead of schedule.
It is set to bring savings equating to £3.8 million annually overall, MOSL said, which is up from the £1.4 million calculated in the original business case.
Meanwhile overall trading party satisfaction scores rose from 3.9 to 4 year on year.
During the year, MOSL reviewed and added 31 existing processes into the new central hub.
This programme has standardised how water wholesalers and retailers interact, which previously had varied between all parties and caused delays for retailers and their customers alike.
This year another 49 lower-volume, low-priority processes have been migrated to the hub, with all remaining processes expected to be transitioned to the hub this year. The second phase is expected to yield further benefits in savings to the value of £1.4 million to the market.
The market operator has endeavored to strip back and simplify processes, under the leadership of chief executive Sarah McMath.
She said: “When I joined MOSL in 2019, I said somewhat flippantly to my team, ‘we need to stop doing stupid things’. Underlining that was earnestness – if things aren’t working, we address them front on, we don’t create workarounds. In 2023/24 this is exactly what we have sought to do.”
The retail market was opened up to competition in 2017 and operated by MOSL, however it has required significant work to overcome what had been dubbed “persistent frictions”. This work has included upgrading data around water meter information and implementing best practice for the sharing of such data.
Two of MOSL’s strategic priorities for the year were Water Security and Market Evolution, which McMath acknowledged as straying into new territory for the market operator. “However,” she said, “what previous years have demonstrated, is that it is impossible for us to do our job of operating the market as effectively as possible, without looking at how the market itself can be improved. This means exploring areas of the market that aren’t working for trading parties or their customers – areas such as water efficiency, tariff complexity and settlement.”
Water efficiency in the non-household sector has gained prominence for the first time in the upcoming price review, with targets set for wholesalers to encourage demand reduction.
Ahead of the draft and final determinations being published by Ofwat, the non-household sector has pushed for a strategic metering strategy by wholesalers of non-domestic customers to be rolled out concurrently to household smart meter installations.
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